Inflation: This is what salary increases will look like this year
Created: 11/30/2022, 4:42 p.m
By: Lisa Mayerhofer
High inflation is causing real wages in Germany to continue to fall.
According to a study, employers only react to these developments with hesitant salary increases.
Berlin – High inflation is causing real wages in Germany to shrink more and more.
In the third quarter from July to September, wages were 2.3 percent higher on paper than in the same period last year, as the Federal Statistical Office announced on Tuesday.
At the same time, however, consumer prices rose by 8.4 percent – real wages fell by 5.7 percent.
According to the statistics, this is the sharpest and longest-lasting drop in real wages since the time series began in 2008.
The employees in Germany had to accept a drop in real wages for the fourth quarter in a row, as the statisticians emphasized: In the second quarter from April to June, real wages fell by 4.4 percent, in the first quarter by 1.8 percent and in the last quarter 2021 by 1.4 percent compared to the respective quarter of the previous year.
Report: Salary increases averaging 3.5 percent for 2022
Working people can therefore afford less and less of their salary due to inflation.
A current study shows that employers are well aware of the situation of their employees - but they only counter this development with hesitant salary increases.
This is suggested by the WTW Salary Budget Planning Report, according to which companies are reacting to the current inflation with average salary increases of 3.5 percent for 2022.
The survey was conducted online between April and May 2022. In Germany, 699 companies from various sectors took part.
When asked by
Wirtschaftswoche
, WTW stated that almost half of the companies will raise wages by 3.1 to five percent - or have already done so.
About 25 percent increase the salary of their employees between two and three percent, seven percent of the companies only by less than two percent.
After all, 13 percent of those surveyed plan an increase of between five and seven percent - and four percent even want a salary increase of more than 7.5 percent.
Increase in salary budgets mainly due to shortage of skilled workers
The bottom line is that salary increases lag behind inflation in most cases.
But why are employers so hesitant?
"In the medium term, companies would also have to pass on larger jumps in personnel costs to their products, which could weaken their position in international competition," says Florian Frank, Head of Work & Rewards at WTW.
"Furthermore, not everyone can afford to increase their staffing expenses on a large scale post-pandemic."
Nevertheless, according to the report, about 62 percent of companies have increased their original salary increase budgets - also because of inflation.
However, according to the report, the most important reason for the increase in budgets is that it is becoming increasingly difficult for companies to find suitable employees.
For almost two thirds, this was the decisive factor in planning larger salary increase budgets, according to the management consultancy.
With material from the dpa
