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This article compares the differences in salary costs & in productivity between Belgium & Portugal, serving as an EU benchmark for respectively high & low salary states, & those in the three major emerging markets, Poland, Hungary, & the Czech Republic, based on information of individual businesses. The study revealed that between 1995 & 2000 the salary costs in Belgium were seven times higher than in the three emerging markets, & four times higher than in Portugal. Also, there is a positive correlation between high salary costs & high productivity. Furthermore, there is no reason to relocate manufacturing of certain industries from high to low salary member states since certain industries generate high salary costs anywhere. In conclusion, there are indications that the evolution of the salary costs in proportion to productivity in Portugal has a limited negative effect on employment in Belgium, whereas salary costs in the NMS have no significant impact. 5 Tables, 11 References. A. Michaux