The high inflation of recent years has significantly shrunk the real wages of employees in Germany. In one area in particular, the old level is still a long way off.
According to the Bundesbank, wages in Germany will rise faster in the coming quarters than in the euro area. The reasons are continued high wage demands in the service sector and a “certain amount of catching up to do” in the manufacturing sector. However, this does not fundamentally call into question the trend towards falling inflation rates.
In industry, employees have made up for their real wage losses from the times of high inflation to a much lesser extent than in the service sector, the Bundesbank states in its monthly report for October. According to this, the seasonally adjusted real wages of industrial employees are currently around four percent below the value from the third quarter of 2021. For service providers, the gap is only around 2 percent.
The investigation comes just before the hot phase of collective bargaining in the German metal and electrical industry, in which IG Metall is demanding wage increases of 7 percent. According to the Bundesbank’s assessment, unfavorable conditions such as location problems and weak foreign demand have prevented higher wage increases. The first warning strikes in the industry are expected from next Tuesday (October 29th).
Higher wage demands were and are being made in the service sector than in industry, not least because of the lack of skilled workers. In system catering, 19 percent more money would be required for a basic wage earner. The Bundesbank expects greater differentiation in the near future depending on the actual supply of skilled workers in the individual sectors.
Monthly reports from the Bundesbank
Source: Stern
