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Sectoral Wage Development: The Key to Greater Wage Increases Lies in Manufacturing

Press Release of August 13, 2014

In the past decade, wages in Germany have risen more slowly than economic performance. Year on year, average wages remained approximately 0.3 percent behind what was available in redistribution volume, given the development of production. Although there are also sectors with low wages, in which wage increases were insufficient according to this benchmark--such as the hospitality industry, construction, or agriculture--it was the economic sectors with relatively high wages that were mainly responsible for the inadequate wage increases. These include, in particular, important industrial sectors producing capital goods, such as automotive or mechanical engineering, and the chemical industry. In order for overall economic performance to develop in line with wages, the labor unions in these sectors need to implement a more aggressive wage policy. However, it is not particularly helpful if--as has been the case up to now--the debate over wage developments is almost exclusively focused on low-wage sectors and the introduction of a minimum wage.