[nhaehnle]

Please, actually read the article. The numbers in the last diagram are relative unit labor costs. In other words, they are labor costs divided by the (market) value of the produced goods. This division incorporates everything you claim to be missing, which is why I feel confident in the claim that you either haven't read or haven't understood the article.

[NotableAlamode]

Krugman claims "Germany, [...] has had much too little wage growth" and offers no argument whatsoever to support this claim. It's pure stipulation!

Indeed, if he were to take his own figures seriously, he would have to argue that e.g. Portugal too does not have enough wage growth vis-a-vis Greece and Italy. But he keeps bashing Germany, as Krugman always does.

Anyway, why should relative unit labour cost be the only relevant measure? Other factors are also important, for example the cost of capital. The more advanced an economy is, the more important cost of capital. Since Greece does not produce capital intensive goods, it should have higher relative unit labor costs. Krugman should know these things ...