Glint of good news: Germans' real wages are rising

German wages are rising faster than in most advanced economies because productivity is rising strongly.

Ferdinand Ostrop/AP/File
This Feb. 24, 2011 file photo shows a worker wrapping a protective liner around a Volkswagen Tiguan at quality control portion of the production line in the Volkswagen plant in Wolfsburg, Germany. Because of falling unemployment and productivity growth, Germans' real wages are rising faster than almost anywhere else in the developed world.

Though the current unemployment rate in Germany at 6.1% is still not low in an absolute sense (there are countries with 3% unemployment rates), it is low by historical German standards and compared with most advanced economies. As a result, workers' bargaining power is improving, especially in the sectors where there is a shortage of workers.

Because of that, and because of rising productivity, real wages in Germany are rising faster than in most other countries, up by 2% in the latest year. By contrast, real wages have dropped in, for example, Britain (where they were down by as much as 2.6%) and America .

There are no sectoral sub-division in the statistics, but probably and hopefully, real wages are rising particularly in sectors with shortages of workers while not rising so much or at all in sectors with continued high unemployment. If so, the increase in real wages will be good not just because higher real wages is a self-end, but also because it will increase employment.

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