According to a recent report from the German Institute for Economic and Social Sciences, real wages for workers in the EU will continue to decline in 2023. Despite stronger wage increases and declining inflation, purchasing power fell by an average of 0.6 percent.
However, the loss of purchasing power has slowed down significantly compared to 2022, the WSI continues. Due to the high inflation at the time, wages in the EU fell by 4.2 percent after price correction, in Germany by as much as 4.4 percent and in Austria by 3.6 percent. This year there are signs of an increase in real wages in almost all EU countries. However, WSI experts believe that this will not compensate for the declines in recent years.
Overall, real wages fell in 12 of the 27 EU countries in 2023. There were particularly significant losses in purchasing power in the Czech Republic (down 4.4 percent), Malta (down 3.8 percent) and Italy (down 3.3 percent). In Austria, last year’s price increases were offset by wage increases.
Experts: “We need to catch up on wage developments”
From the perspective of the employees, the crisis has not yet been overcome, according to WSI researchers Thilo Janssen and Malte Lübke. “They have borne the brunt of the real income losses related to the energy price shock resulting from Russia’s attack on Ukraine.” “There is still some catching up to do” when it comes to wage developments. After all, consumer prices would have risen permanently, but just as quickly stopped rising when the wave of inflation came to an end.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
