German wages are rising faster than in most advanced economies because productivity is rising strongly.
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.
Skip to next paragraph Stefan KarlssonStefan is an economist currently working in Sweden.
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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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