According to a study, the collectively agreed wages of employees will rise considerably more slowly than inflation this year. The average wage increase is 1.7 percent, according to the balance sheet published on Thursday by the collective bargaining archive of the Economic and Social Science Institute (WSI) of the trade-related Hans Böckler Foundation. Consumer prices, on the other hand, are likely to rise significantly faster by 3.1 percent, which results in "an unusually strong real wage loss" of 1.4 percent. However, this loss of purchasing power will be mitigated by tax-free and duty-free corona premiums in many industries. These ranged between 90 euros in the confectionery industry and 1,300 euros in the public service of the federal states. The lower income groups in particular would benefit particularly strongly from the Corona premiums.
Overall, new collective agreements were concluded for more than twelve million employees in the year that is drawing to a close, according to the union-affiliated institute. In addition, there are increases for a further six million employees, which were agreed in 2020 or earlier. The older qualifications provide for slightly higher wage increases with an average of 2.0 percent than those of 2021 with 1.5 percent. For many unions, in view of the Corona crisis, the focus was on maintaining jobs, while companies did not want to add too much because of the uncertain prospects for personnel costs.
"The 2021 wage round was still shaped by the uncertain course of the corona pandemic and the associated economic uncertainties," said the head of the WSI tariff archive, Thorsten Schulten.
“As a result, this leads to rather moderate increases in collective wages.” While in 2020 employees were able to record strong real wage growth due to the then very low inflation rate of 0.5 percent, high inflation rates this year for the first time in a long time have significantly exceeded the collective wage increases.
For 2022, the institute expects prices to normalize again, while collectively agreed wages could rise somewhat more strongly at the same time.
“So far there is no basis in the tariff data for the specter of a wage-price spiral, which some have painted on the wall,” said tariff expert Schulten.
Some economists fear that because of the higher inflation, the unions will be able to push through significantly stronger wage agreements in order to curb purchasing power losses.
Sharply rising personnel costs, in turn, could prompt companies to raise their sales prices sharply in order to maintain profit margins.
This could set in motion a spiral of ever increasing prices and wages.