Wages in Germany up 2.5pct in Q1

Wages in Germany have increased by 2.5 percent in the first quarter (Q1) of 2019, the German Federal Statistical Office (Destatis) announced on Monday.

Since consumer prices had increased by 1.4 percent, the resulting “real growth” in earnings of employees in Germany amounted to 1.2 percent in Q1, according to Destatis, reports BSS.

“In view of the recent weakness of the economy and corporate profits, increases in nominal wages in the first quarter were lower than in the previous quarter,” Thore Schlaak, labor market expert at the German Institute for Economic Research (DIW), told Xinhua. However, as inflation slowed noticeably despite sharp increases in energy prices, the gains in purchasing power among employees in Germany would have remained at “roughly the same level as in previous quarters”, Schlaak added.

According to Destatis, wages rose particularly strongly in the sectors of real estate and housing as well as information and communication, each with an increase of 5.0 percent in Q1. Wages in arts, entertainment and recreation also rose at an above-average rate of 4.3 percent. The income of educators and teachers in Germany rose below average by 1.3 percent each in Q1. The earnings of employees who provide freelance, scientific and technical services rose even weaker at 0.9 percent, according
to Destatis.

During the period, a law came into force which is stipulating employers and employees to pay equal contributions to the German health insurance system. Previously, employees had to bear certain costs for health insurance alone.

“The creation of parity” between employers and employees in the payment of contributions to the statutory health insurance system would be “likely” to have led to higher net wages, said Schlaak.