Romania home to large disparities in gross hourly earnings

According to an Eurostat survey, gross hourly earnings vary heavily among European Union Member States. Discrepancies were recorded not only between the 10 percent of employees earning the least and the 10 percent earning the most, but also according to the economic activity.

Financial and insurance activities are among the highest paying industries in every EU Member State and accommodation and food services among the lowest paying, the survey shows.

According to the survey, the largest earnings disparities were recorded in Romania, Poland, Cyprus, Portugal, Bulgaria and Ireland. Disparities in gross hourly earnings within a country can be measured using deciles, and in particular the lowest and highest deciles, which correspond to the 10 percent of employees earning the least (D1) and to the 10 percent earning the most (D9). As a consequence, a high D9/D1 interdecile ratio indicates large disparities.

Across the EU Member States in 2014, the D9/D1 dispersion ratio ranged from 2.1 in Sweden to 4.7 in Poland. This means that the 10 percent best-paid employees earned at least twice as much as the 10 percent lowest-paid in Sweden, and nearly five times as much in Poland. After Poland, Romania (with a ratio of 4.6), Cyprus (4.5), Portugal (4.3), Bulgaria (4.2) and Ireland (4.1) registered high disparities in gross hourly earnings. In contrast, the lowest D9/D1 ratios were recorded, after Sweden, in Belgium, Denmark and Finland (all with a ratio of 2.4), France (2.7) and Malta (2.9).

The highest disparity on the upper end of the gross hourly earnings distribution in 2014 was registered in Portugal (with a D9/Median ratio of 2.8). This means that the 10 percent best paid employees in Portugal earned almost three times as much the median. Portugal is followed by Bulgaria, Cyprus, Poland and Romania (all with a ratio of 2.5), Latvia (2.3), as well as Ireland, Lithuania, Luxembourg, Hungary and the United Kingdom (all 2.2). In contrast, Denmark and Sweden (both with a ratio of 1.6), Finland (1.7), Belgium, France, Malta and the Netherlands (all 1.8) recorded the lowest.

For the lower end of the gross hourly earnings distribution, disparities in 2014 were largest in Estonia (with a Median/D1 ratio of 2.0). This means that, in Estonia, the 10 percent least paid employees earned half of the median earnings. Estonia is followed by Germany, Ireland and Poland (all 1.9), the Czech Republic, Cyprus, Lithuania, Romania and Slovakia (all 1.8). At the opposite end of the scale, the lowest disparities in the lower end of distribution were recorded in Sweden (with a ratio of 1.3), Belgium and Finland (both 1.4), Denmark, France, Italy and Portugal (all 1.5).

The Eurostat survey is based on the latest results of the four-yearly Structure of Earnings Survey.