Germany sees sharpest drop in real wages since 2008 due to high inflation

Germany sees sharpest drop in real wages since 2008 due to high inflation

As salaries in Germany rise, they are being eaten away by inflation: the latest figures from the Federal Statistical Office (Destatis) have shown that the persistently high inflation rate is increasingly devaluing people’s wages, resulting in a real wage loss. 

Inflation eating into salaries in Germany

Salary increases in Germany can no longer keep up with the rapidly-rising cost of goods and services. As Destatis announced in a press release this week, incomes in the third quarter of 2022 were nominally 2,3 percent higher than in the same period last year, but could in no way keep up with the 8,4-percent rise in consumer prices. 

According to the statisticians’ calculations, when rising wages are adjusted for price developments - the spiralling cost of everything from food and energy to public transportation and rent - Germany is facing a real wage loss of 5,7 percent, the highest level recorded since Destatis began measuring real wage developments after the financial crisis of 2008. 

“Inflation thus more than consumed the increase in nominal wages in the third quarter of 2022,” Destatis wrote in its press release. 

Fourth quarterly real wage drop in a row 

This latest real wage loss follows hot on the heels of further losses over the past three quarters: -1,4 percent in the final quarter of 2021, -1,8 percent in the first quarter of this year, and -4,4 percent in the second quarter of 2022. 

This is the first time ever such a prolonged period of real wage losses has been recorded by Destatis and was described by the statisticians as the “strongest and longest-lasting drop in real wages” since 2008. 



Abi Carter

Managing Editor at IamExpat Media. Abi studied German and History at the University of Manchester and has since lived in Berlin, Hamburg and Utrecht, working since 2017 as a writer,...

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