How salaries develop, taking inflation into account, is referred to as real wages. The decline was particularly sharp last year. Employees have had to accept losses for years.
Adjusted for prices, Germans had significantly less money at their disposal last year. Because real wages in Germany fell by 4.0 percent last year compared to 2021. This was announced by the Federal Statistical Office on Thursday. So far, only a minus of 3.1 percent had been assumed.
A decline of four percent is the strongest contraction since statistics began in 2008 and is also the third minus in a row. Because there were also losses in the Corona years 2020 (-1.1 percent) and 2021 (-0.1 percent), but they were significantly lower.
High inflation eats up wage increases
The reason for the significant correction of consumer price increases of 6.9 percent. Growth in nominal wages, which rose by 2.6 percent according to the revised data, could not keep up. “While in 2020 the increased use of short-time work in particular contributed to the negative development in nominal and real wages, in 2021 and especially in 2022 high inflation consumed nominal wage growth,” the statisticians explained.
The Wiesbaden authority revised figures from March 1st because of different earnings. The increase in nominal wages was 0.9 percentage points weaker than initially calculated, since smaller companies, for example, are now also included and all other types of employment such as trainees and semi-retirement employees are shown in addition to full-time, part-time and marginal part-time employees.
Rising real wages not expected until 2024
For the current year, many experts expect real wages to fall again. Because inflation in Germany is still high, especially the so-called core inflation is causing headaches for central bankers. A wage increase, which is currently being negotiated for many employees or has already been decided, is likely to be eaten up again by inflation. Real wages could only increase again in the coming year if the inflation rate falls as forecast.
Despite falling real wages, the number of labor disputes in Germany has hardly increased in the past year. A total of 225 labor disputes were held, in which 930,000 strikers took part, according to the trade union-related Economic and Social Science Institute (WSI) of the Hans Böckler Foundation. For comparison: in 2021 there were 221 labor disputes with 909,000 strikers.
For 2023, however, high levels of warning strike participation in the postal, railway and public sector in the first few months indicate that the volume of industrial action “could increase significantly”.