May the 25th, 2022 - Croatian IT sector wages continue to be the lowest in the entire European Union (EU) despite the fact that this rapidly blossoming field has experienced a very real boom over the last few years.
As Poslovni Dnevnik/Marija Brnic writes, the cost of paying out wages for EU-based employers has continued to rise in most countries, with the exception of a few countries that stalled in 2020 and continued to grow, including the Republic of Croatia.
According to a quarterly analysis of labour market trends by the Croatian Bureau of Statistics (CBS), based on Eurostat data, only Ireland, Croatia and Cyprus had a temporary halt in gross hourly wage growth, while in Spain and Italy, gross hourly wages rose in the first year of the coronavirus pandemic, but last year they ended up below the levels seen back in 2020.
The level of wage costs paid by employers per hour with all costs varies significantly between EU member states, from 7 euros in Bulgaria and 8.5 in Romania, to 41.6 euros in Belgium, 43 in Luxembourg and 46.9 in Denmark.
Compared to Croatia, where the average hour of work costs an employer around 11.2 euros, Bulgaria and Romania have a lower hourly rate, as do Latvia and Hungary, and employers in Lithuania and Poland have slightly higher costs to deal with. In neighbouring Slovenia, with which Croatia often likes to compare itself, the gross hourly wage is almost twice as high (21.1 euros).
Given the current alarm bells ringing from certain sectors, primarily hotels and the hospitality and catering field, the lack of qualified workers even despite the abolition of the annual quota system for the employment of foreign (non-EEA) workers, we can expect that in the Croatian case, hourly rates will have stronger growth in the 2020 report, but if we look back three years, wages have fallen in most sectors, with the exception of education, healthcare, entertainment and the arts.
The lowest hourly rates in Croatia were in administrative services (8.3 euros) and hotels and restaurants (8.6 euros), and the highest in the information and communication sectors (15.9 euros), finance (15.5 euros) and science (15.2 euros).
In the EU's finance and insurance sector last year, hourly rates ranged from 9.9 euros in Bulgaria to 77.3 euros in Luxembourg, and in professional, scientific and technical activities, they ranged from 10.9 euros in Bulgaria to a significantly higher 57.9 euros in Denmark.
In healthcare, hourly wages in the EU rose in all countries except Greece, ranging from 8.1 euros in Bulgaria to 45.2 euros in Luxembourg. And although the sector is the largest, Croatian IT sector wages remain the lowest in the entire EU, with Sweden leading in that regard with an impressive 57.7 euros per hour.
When it comes to tourism, last year, ranges from a mere 3.8 euros in Bulgaria to 40.7 euros in Denmark were the norm. Croatian hourly rates were at the level of Estonia, and Cyprus, Latvia, Lithuania, Hungary, Poland, Malta, and Romania take home less per hour.
Looking at other competitors when it comes to sea and sunshine, only in Greece, regardless of the coronavirus pandemic, the price of an hour of work in tourism rose (to 15.2 euros), while in Spain and Italy it decreased slightly last year, and in the Croatian case, last year saw slight recovery, but that recovery failed to reach the record high of pre-pandemic 2019 of 9.1 euros. In neighbouring Slovenia, on the other hand, the hourly wage in the tourism sector stands at 14.6 euros.
In the manufacturing industry, hourly rates last year ranged from 5.8 euros in Bulgaria to 48.5 euros in Denmark, with only Germany, Sweden and Belgium seeing people take home more than 40 euros per hour. Here in Croatia, the price of an hour's work stood at 10.3 euros and is slightly higher than before the pandemic, but it is significantly lower than the sum just across the border in Slovenia (20.3 euros).
They have a lower gross hourly wage than Croatian industrialists in Romania (7.3 euros). In construction, only in Denmark do employees have an hourly salary of more than 40 euros, and the lowest of all can be seen in Bulgaria, Romania and neighbouring Hungary, and Croatian salaries are just over theirs, standing at 10 euros.
In Germany, on the other hand, where Croatian builders like to head to, gross hourly rates are lower than those in the manufacturing industry, which analysts associate with the employment of foreign workers, which increases labour supply and reduces wages. This is not the case, for example, in nearby Austria.
Much like in construction, the Danes are the only ones in trade to have an hourly rate above 40 euros, and the lowest can, once again, be seen in Bulgaria (6.3 euros), which is less than in Croatia (11.1 euros).
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