The FINANCIAL — German workers scored record-high wage increases in the first quarter of 2015, a trend that is boosting private consumption but could hurt the country’s famed competitiveness, according to Nasdaq.
Wages in Europe’s largest economy rose by 2.5% from the first quarter of 2014, in real or price-adjusted terms, the federal statistics office said on July 2, largely due to record-low inflation.
This was the highest gain since records began in 2008 and alternative data on real wages published by Destatis suggests that this was also the highest increase since the fourth quarter of 1992, when wages in East Germany rose sharply following the country’s unification.
Nominal wages also rose by 2.5% from the year-earlier period, because consumer prices were flat, the federal statistics office said.
There were also early signs that the introduction of a minimum wage has driven up pay, as wage gains were particularly pronounced among unskilled workers and the marginally employed.
Wages in those two categories increased by 4% and 5% respectively, both in nominal and price-adjusted terms, Destatis said. But it would not quantify the impact of the minimum wage on the index. A minimum wage of 8.50 euros($9.40) an hour came into effect in January.
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