Friday, June 24, 2011

German Real Wages Rises

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 to most advanced economis. As a result, worker's bargaining power is improving, especially in the sectors where there is a shortage of worker.

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 much 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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