How are earnings distributed in the EU?

Notable discrepancies can be observed in the Member States of the European Union (EU) in gross hourly earnings, not only between the 10% of employees earning the least and the 10% earning the most, but also according to the economic activity, with financial and insurance activities being among the highest paying industries in every EU Member State and accommodation and food services among the lowest paying.

This information on earnings disparities is issued by Eurostat, the statistical office of the European Union. It is based on the latest results of the four-yearly Structure of Earnings Survey. They are complemented with a more detailed on-line article and an interactive infographic on earnings by economic activity.

Largest earnings disparities in Poland, Romania, 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% of employees earning the least (D1) and to the 10% earning the most ( D9). As a consequence, a high D9/D1 interdecile ratio indicates large disparities, The Finanancial observes.

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% best-paid employees earned at least twice as much as the 10% 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).

Largest gap between high & median wages in Portugal, between median & low wages in Estonia

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% 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% 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).

Finance & insurance and Information & communication among the highest paying industries…

On the basis of gross monthly earnings, “Financial and insurance activities” ranked among the 3 highest paying economic activities in every EU Member State, except Ireland (where it ranked 4th). The sector “Information and communication” was also largely represented among the top 3 paying industries, with the exceptions of Belgium, Spain and the Netherlands (where it ranked 4th), Italy and Luxembourg (5th position) and Cyprus (6th place).

“Electricity, gas, steam and air conditioning supply” was the best paying industry in Belgium, Germany, Spain as well as Austria, and ranked second in Bulgaria, the Netherlands, Portugal, Slovenia and Finland. “Mining and quarrying” ranked first in Denmark, the Netherlands and the United-Kingdom and second in Poland and Romania. As for “Education”, it was the best paying economic activity in Luxembourg and the second in Cyprus. Finally, “Professional ,scientific and technical activities” ranked among the 2 highest paying industries in only one Member Sate: Belgium.

… Accommodation & food and Administrative and support services among the lowest paying

At the opposite end of the ranking, “Accomodation and food service activities” was identified in 2014 as the lowest paying activity of the economy in all Member States, except Spain, Malta and Slovenia (where it was the penultimate). “Administrative and support service activities” also ranked widely in the bottom 3, with the exceptions of Hungary, Malta (last but 3 position), Estonia and Cyprus (last but 4) and Latvia.