In the first quarter of 2022

Labour Cost Index decreased by 1.4% when compared with the same quarter of the previous year

The Labour Cost Index (working days adjusted) decreased by 1.4% in the 1^st quarter of 2022, compared with the same period of 2021.

The two main labour cost items are “wage costs” and “other costs”.

Wage costs (per hour effectively worked) decreased by 1.4% compared to the same quarter of the previous year.   

It includes:

• Base wage
• Regular bonuses and allowances
• Irregular bonuses and allowances (holiday bonus, Christmas bonus, end-of-year bonuses/distribution of profits, other irregular bonuses and allowances)
• Payment of overtime
• Payment in kind

Other costs (non-wage, also per hour effectively worked) registered a year-on-year decrease of 1.3%.

It includes:

• Severance payment
• Employers’ legal costs (social security contributions, insurance against accidents and occupational disease)
• Collectively agreed, contractual and voluntary costs (supplementary pension/invalidity benefit, health insurance, life/personal accident insurance, and social benefits paid directly to employees in case of absence on account of sickness)

The reason for the regional decrease in the LCI was because the increase in the hours effectively worked per worker was higher than the rise in the average cost per worker. It should be noted that in the 1^st quarter of 2021 there was still some restrictions in the economic activity due to the pandemic, which affected, tourism activity, with the number of overnight stays in that period falling by 81.8% year-on-year.

At the country level, the index increased by 1.1% year-on-year. “Wage costs” went up by 0.4% and the “other costs” by 3.8%. These figures result from the increase in hours effectively worked per worker being lower than the growth in average cost per worker.

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