Third highest hourly wage cost in Europe: Belgium in the lead

Belgium is one of the European countries with the highest hourly wage costs, occupying third place, just behind Denmark and Luxembourg. This observation arouses as much admiration as debate on the economic and social impacts of such a position.

An average that reflects a high standard of living

In 2023, the average hourly wage cost in Belgium is around 41 euros, according to Eurostat data. This sum includes not only net salaries, but also employer contributions and social security contributions. This high level can be explained by several factors:

1. A robust social protection system: Social contributions finance quality public services, particularly in the areas of health and pensions.
2. A high level of qualification of workers: The country relies on a highly skilled workforce to compensate for the cost of labour.
3. Established social dialogue: Consultation between employers and trade unions ensures fair remuneration and attractive working conditions.

Challenges for companies

However, this high hourly wage cost also represents a major challenge, especially for small and medium-sized enterprises (SMEs) that struggle to compete with foreign competitors where wage costs are significantly lower.

• International competitiveness: The gap with countries such as Poland or Romania, where the hourly cost is up to four times lower, encourages some companies to relocate.
• Innovation needed: To remain competitive, Belgian companies need to focus on high-value-added sectors and process automation.

A model to be rethought?

Belgium is often criticised for its ratchet effect, a system where wages automatically increase according to price indexation. Although this policy preserves the purchasing power of households, it increases employers’ costs.

To respond to these criticisms, reforms are under discussion:

1. Reduction of charges: Reduction of employer contributions to encourage hiring.
2. Increased flexibility: Adopting hybrid work models to meet the needs of businesses and employees.
3. Stimulate investment: Foster cutting-edge sectors such as technology and digital services, where added value outweighs costs.

National pride

Despite these challenges, this high wage cost is also a testament to the quality of life in Belgium. It reflects a society where workers’ rights are protected and access to efficient public services is guaranteed.

“High wage costs are not only a handicap. It is also an opportunity to focus on innovation, quality and value creation,” says Pierre-Yves Dermagne, Minister of the Economy.

Conclusion

By occupying third place in hourly labour costs in Europe, Belgium faces a delicate balance between economic competitiveness and maintaining a demanding social model. Future reforms will need to reconcile these two ambitions to ensure a prosperous future for both businesses and workers.