According to German study:

Prices in the EU rose faster than wages

(Bild: stock.adobe.com/Tobif82)

According to a recent report by the German Institute of Economic and Social Sciences, the real wages of employees in the EU continued to fall in 2023. Despite stronger wage growth and falling inflation, purchasing power fell by an average of 0.6 percent.

Compared to 2022, however, the loss of purchasing power has slowed significantly, the WSI continued. Due to the high inflation rates at the time, wages in the EU fell by 4.2 percent in price-adjusted terms, in Germany by as much as 4.4 percent and in Austria by 3.6 percent. For this year, there are signs of a rise in real wages in almost all EU countries. However, the WSI experts believe that this will not compensate for the declines of recent years.

Inflation has leveled off within the EU, but purchasing power is still falling in many member states.

(Bild: dpa/Marc Müller)

Overall, real wages fell in twelve of the 27 EU countries in 2023. There were particularly significant losses in purchasing power in the Czech Republic (minus 4.4%), Malta (minus 3.8%) and Italy (3.3%). In Austria, the price increases last year were offset by wage increases.

Experts: "There is a need to catch up in terms of wage development"
WSI researchers Thilo Janssen and Malte Lübke believe that the crisis has not yet been overcome from an employee perspective. "They have borne the brunt of the real income losses associated with the energy price shock resulting from the Russian invasion of Ukraine." There is "still some catching up to do" in terms of wage development. After all, consumer prices have risen permanently, they just haven't risen as quickly since the wave of inflation came to an end.