Significant wage increases are accompanied by less significant price increases. As a result, people can afford more again.
Germany’s employees are continuing to make up for the loss of purchasing power from the period of high inflation. In the second quarter, increases in gross wages exceeded the development of consumer prices for the fifth time in a row, according to the Federal Statistical Office. While salaries were nominally 5.4 percent higher between April and June than a year earlier, inflation in this period was only 2.3 percent. This results in a real wage increase of 3.1 percent.
Previously, employees had suffered significant losses in their purchasing power. From the end of 2021 to the beginning of 2023, real wages had fallen for six consecutive quarters because consumer prices had risen sharply following the Russian attack on Ukraine. There had also been significant losses during the Corona period from early summer 2020.
The highest wage increases were for people with comparatively low earnings. For the lowest quarter, nominal wages rose by 7.6 percent in the second quarter compared to the same period last year. Full-time employees received 5.7 percent more gross.
Destatis Communication Real wage development Q2/2024
Source: Stern
