High inflation in Germany has triggered a historically high loss of real wages this year. In 2022, negotiated wages increased by an average of 2.7% compared to the previous year. Given an expected inflation rate of 7.8% for the year as a whole, this results in an average drop in real wages of 4.7%, according to data from the WSI wage file. from the Hans Böckler Foundation.
This is a “unique real wage loss in the history of the Federal Republic of Germany”, said the head of WSI’s collective bargaining archive, Thorsten Schulten. The huge increase in inflation poses completely new challenges for wage policy, to which it can only react with a certain time lag. “On the one hand, no collective bargaining took place in many sectors in 2022 due to long-term effective collective agreements. On the other hand, currently agreed upon, significantly stronger collective wage increases and inflation premiums will often only come into effect from 2023 .” explained the expert.
According to WSI, with a total of 2.7 percent, the average increase in collective bargaining agreements in 2022 is above the corona years of 2020 (2.0 percent) and 2021 (1.7 percent). At the same time, however, it is lagging behind the wage increases of the two expansion years of 2018 and 2019 (3.0 and 2.9%, respectively). “After 2021, in 2022 there was a significant loss of purchasing power in collective wages for the second consecutive year”, concludes the WSI.