Enhanced buying capacity or amplified financial means to make purchases. - In Lower Saxony, salaries are increasing at a faster pace than inflation.
Workers in Lower Saxony are still compensating for the decrease in buying power caused by the high-inflation era. In the second quarter, gross wages surged by 6.8% compared to the prior year, surpassing prices that just rose by 2.1%, according to the State Statistical Office's data. After accounting for inflation, actual wages climbed by a robust 4.6%, marking the strongest growth since the survey's inception in 2008.
The statisticians attribute this primarily to the decline in inflation and substantial wage hikes. This is the fourth consecutive quarter where earnings have shot up more than prices. In the first quarter, real wages had inched up by 2.3% after accounting for inflation.
Prior to this, workers had endured significant reductions in their buying power. There were eight straight quarters where real wages dropped from mid-2021 to mid-2023, a consequence of the steep inflation in consumer prices triggered by Russia's attack on Ukraine. The COVID-19 period, starting in the early summer of 2020, also brought about substantial losses.
Despite the challenging economic periods due to high inflation and the COVID-19 pandemic, Lower Saxony workers have managed to recover their buying power significantly. The robust growth in real wages, as highlighted by the State Statistical Office, has been a consistent trend in the region since the beginning of 2023.
