4.2. Structural aspects
4.2.3. Large variations of labour productivity among the subsectors
Comparisons of sector-specific labour productivities show clearly that labour pro- ductivity in the service sector is below that of manufacturing industry (115).
Regarding the labour productivity in the tourism industry, the picture is as diverse as in Chapter 3 concerning the enterprises in the various subsectors.
If the Horeca sector is taken as one sector, its labour productivity is — as Fig- ure 4.2.3.a shows — only half of the average labour productivity in the service sector and one of the lowest of all services (116).
(114) The share of male employment in southern Europe (except Portugal) comes to more than 50 %, in the north- ern countries less than 50 %. Source:Eurostat,Statistics in Focus, 6/2003, 11.2.2003, p. 4, as well as Eurostat, European business, op. cit.
(115) Source:Eurostat, Employment in the market economy in the European Union — an analysis of the structural busi- ness statistics, 2003 edition, pp. 23 ff. Labour productivity is defined as the relationship of the value added generated in a sector to the number of persons occupied to create it. This definition does not consider dif- ferences in the extent of part-time work which is typically high in the subsector of restaurants, cafes and bars.
(116) Eurostat, news release, 12.5.2003, 54/2003, p. 1.
Hotels/restaurants
Air transport Travel agencies Total market services
0 10 20 30 40 50
Source: Eurostat, news release, 54/2003, 12.5.2003, ‘Employment in European business in 2000’.
Figure 4.2.3.a: Labour productivity in market services in EU Member States, 2000 (EUR)
Other subsectors of the tourism industry such as the travel organisers and air trans- port show a completely different picture. Their labour productivity is nearly three and four times higher than that of the Horeca sector and clearly exceeds that in the service sector in general (117).
But the impression of low labour productivity in the Horeca sector is mainly due to the restaurants, bars and cafes which represent 75 % of persons occupied, against 25 % in accommodation (118).
Separate calculations of labour productivity in the accommodation subsector on the one hand and restaurants, bars and canteens on the other lead to the result that labour productivity in the accommodation subsector is in all Member States markedly higher than in the area of restaurants, bars and canteens and is — with a few exceptions — close to that of the travel organisers.
(117) Eurostat, Employment in the market economy, p. 5. The higher labour productivity in air transport could be explained by the higher capital intensity which exceeds the average in the service sector by far. This means that the employment needed is lower and in consequence the labour productivity (per capita) is much higher.
(118) Eurostat, European business, facts and figures, Part 5, Trade and tourism, data 1991–2001, p. 336.
(119) Source:Eurostat, Employment in the market economy in the European Union, p. 50. The wage level in the Hore- ca sector is difficult to evaluate since the tips received play an important role at least in restaurants and cafes.
(120) Eurostat, European business, facts and figures, Part 5, Trade and tourism, data 1991–2001, p. 323.
(121) As to the definition of the wage-adjusted labour productivity (see Annex A1 on page 69).
(122) (Apparent labour productivity/personnel costs per employee)*100.
Table 4.2.3.b. Apparent labour productivity in selected Member States (value added in 1 000 EUR)/(number of employees)
Countries Hotels Restaurants Travel agents
NACE 55.1–55.2 NACE 55.3–55.5 NACE 63.3
Germany 24.9 16.8 68.7
Spain 27.8 13.2 27.3
France 33.8 25.0 38.8
Sweden 36.4 24.3 33.2
United Kingdom 29.9 16.6 41.5
Source:Eurostat: European business, facts and figures, Part 5, Trade and tourism, data 1991–2001, p. 336.
Table 4.2.3.c: Wage-adjusted labour productivity in selected Member States (122)
Countries Hotels Restaurants Travel agents
NACE 55.1–55.2 NACE 55.3–55.5 NACE 63.3
Germany 150.9 146.0 239.0
Spain 169.2 114.4 135.5
France 135.6 113.9 117.2
Sweden 135.6 114.7 100.8
United Kingdom 197.4 155.7 147.3
Source: Eurostat: European business, Facts and figures, Part 5, Trade and tourism, data 1991–2001, p. 336.
As wage levels depend on the labour productivity of a sector, the Horeca sector pays wages significantly below the average of the service industry (119), whereas the factor costs in the travel organisers subsectors are significantly higher (120).
If one looks, therefore, at the ‘wage-adjusted labour productivity’ of these subsec- tors, i.e. the apparent labour productivity divided by the labour costs per person employed (121), instead of at the labour productivity per capita, the variations between the subsectors are much smaller.
The low wage level in the Horeca sector is — apart from working conditions — another important reason for the higher fluctuation of employees and their lower age, since career perspectives that would lead to a rise in income are missing (123), whereas the risk of variations in employment are on average higher than in the other branches.
Furthermore, the lower wages in the Horeca sector, determined by its labour pro- ductivity, explain the difficulties of enterprises in some destinations in hiring per- sonnel, for the jobs are considered less attractive because of the low wage level and working conditions.
On the other hand, lower labour productivity is the main reason for the increase of employment in this sector and the contribution of the Horeca sec- tor to total employment. If labour productivity is defined as value added per per- son occupied, it is obvious that low labour productivity in a sector means that yielding a certain output needs more employment than in sectors with higher labour productivity.
(123) According to the final report of PricewaterhouseCoopers to the European Commission, only the travel organ- isers and the transport sector have relatively good career perspectives. In these two sectors a significant cor- relation between employees’ loyalty and remuneration and career perspectives was observed. See PWC, final report, op. cit., p. 122.