German employees saw the highest increase in real wages in at least 16 years last year, official figures showed on Wednesday, as salary rises coincided with a significant drop in inflation.
The Federal Statistical Office said real wages – the difference between nominal wage increases and inflation – were up 3.1% in 2024, the highest figure since the Wiesbaden-based agency started measuring the statistic in 2008.
Average gross wages increased by 5.4%, as major German employers negotiated new collective wage agreements and offered compensation payments to offset the effects of high inflation in the preceding two years.
After a wave of significant price hikes following the coronavirus pandemic and the Russian invasion of Ukraine, inflation fell to 2.2% in 2024, further easing the cost of living crisis.
The final quarter of 2024 saw real wages rise for the seventh quarter, up 2.5%.
According to calculations by the Hans Böckler Foundation, however, German real wages remain below the pre-pandemic level of 2019.
And lower increases in gross wages are expected in 2025 as a result of the one-off compensation packages many companies handed out last year.
The high payments led to an above-average increase in nominal wages of 7.8% for the lowest-income workers in Germany in 2024.
According to the surveys, women earned an average of 5.8% more in 2024, compared to 5.3% for men.