Germans enjoy highest real-wage rise in decades | Business| Economy and finance news from a German perspective | DW | 04.02.2016
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Germans enjoy highest real-wage rise in decades

After almost a decade of belt-tightening, Germans have enjoyed rising real wages in the past few years, culminating in the strongest increase in more than 20 years in 2015. A new minimum wage also improved incomes.

Official data for 2015 released by Germany's statistics office, Destatis, on Thursday, showed wages in Europe's largest economy rose 2.5 percent in real or price-adjusted terms last year - the biggest annual increase since 1992, according to a Destatis spokesperson.

In nominal terms, wages increased by 2.8 percent on average, while annual inflation came in at 0.3 percent, the statisticians calculated.

While stagnating economic growth in the decade following the turn of the millennium had led to a number of years with falling real incomes in Germany, they started to significantly grow again after 2008, Destatis data showed. In 2014, real wages in Germany increased by 1.7 percent - the second biggest rise in the past decade.

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Minimum wage impact

Destatis said that it was not yet able to quantify the full impact on the index from the national minimum wage introduced at the beginning of 2015. Evidence would suggest, however, that "the pay of employees with below-average wages saw large nominal increases."

Last year, Chancellor Angela Merkel's coalition government introduced a legal minimum wage of 8.50 euros ($9.40) per hour in efforts to shore up incomes in the country's low-wage sectors.

Destatis now said that the gross monthly wage of untrained workers, for example, had risen by 4.1 percent last year. Destatis also noted that different rates of wage increases were seen in eastern and western Germany.

While employees in the former Communist eastern half of Germany saw their pay increase by 3.9 percent, wages of their western German counterparts rose by 2.5 percent.

Following German unification in 1990, companies in the economically depressed East made huge efforts to boost productivity and wages to keep skilled personnel from moving into the more affluent West.

uhe/kd (Reuters, dpa, AFP)

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