Income - Wage increases barely compensate for inflation
Despite comparatively high wage settlements, many employees covered by collective wage agreements will again have to accept real wage losses in the current year. This is the result of an analysis presented on Thursday by the trade union Böckler Foundation, which examined collective agreements for a total of around 14.8 million employees. According to the study, collectively agreed wages rose by an average of 5.6 percent in the current year and thus remained below the assumed annual inflation rate of 6.0 percent.
Thorsten Schulten, head of the foundation's own WSI collective bargaining archive, explained that inflation was only exceeded in most cases once the individual tax and contribution advantages of the high one-off payments were taken into account.
Nominal pay increases of this magnitude have not been seen since the introduction of the current series of statistics in 1998. Equally unprecedented in this period, however, is the sharp rise in inflation following the Russian war of aggression against Ukraine. In order to alleviate the consequences for employees, the German government had agreed with employers and trade unions to exempt collectively agreed special payments of up to 3,000 euros from tax and duties in 2023 and 2024.
According to Schulten, this effect cannot be calculated across all collectively agreed wages. As an example, he cited the agreement in the federal and local public sector, which, with this effect, resulted in salary increases of 9.8 percent instead of 6.8 percent without it.
Expert: Less pressure on contractual partners
The one-off payments themselves have been included in the calculations for 2023 and are now dampening the expected wage increases for the coming years. They would have offset the price increases in the current year, as intended by politicians, said Schulten. The flat-rate inflation compensation premiums had primarily benefited the lower wage groups, which also benefited above average from the frequently agreed fixed amounts for wage increases. "The parties to the collective agreement have thus taken into account the fact that the lower wage groups suffer particularly from the high rates of price increases."
In view of falling inflation rates, the expert expects slightly less pressure on the contractual partners in the coming year. However, in view of the real wage losses in recent years, there is still a great need to catch up. According to Böckler's calculations, current real wages are now back at the 2016 level after three years of negative growth.
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- Despite the high one-off payments agreed upon by the German government, many employees in Germany will still experience real wage losses due to inflation, as analyzed by the Böckler Foundation.
- Thorsten Schulten, head of the foundation's WSI collective bargaining archive, stated that inflation was often exceeded by the individual tax and contribution advantages of the high one-off payments, but this effect is not universal across all collective agreements.
- In the federal and local public sector, for example, the one-off payment led to a significant increase in salary, with wages rising by 9.8 percent instead of 6.8 percent without the effect.
- According to Schulten, the one-off payments have contributed to dampening the expected wage increases for the coming years, as they have helped offset the price increases in the current year, which were intended by politicians to alleviate the consequences of inflation.
- Despite falling inflation rates in the coming year, Schulten emphasizes the need for real wage catch-up, as current real wages in Germany have returned to the 2016 level after three years of negative growth.
Source: www.stern.de
