Wednesday 17th February 2021
Worse than in financial crisis
Wages are falling for the first time in over ten years
The Germans had hardly felt the last major economic crisis and the global financial crisis a good ten years ago in their wallets. In the corona pandemic, things are different. Despite falling wages, however, German citizens have become richer overall.
For the first time in more than a decade, wages in Germany fell noticeably in 2020. As reported by the Federal Statistical Office, nominal wages, i.e. without taking inflation into account, fell for the first time since the surveys began in 2007.
Including special payments, gross wages were nominally 0.6 percent lower than a year earlier, it said on the basis of preliminary figures. Since consumer prices have risen by 0.5 percent at the same time, employees actually received around 1 percent less wages than in 2019. However, the statistics do not take into account the short-time work allowance, which at least cushioned the loss of income for millions of workers during the Corona crisis.
The decline in 2020 was therefore much more severe than in the global financial and economic crisis of 2009. At that time, nominal earnings rose by a minimal 0.2 percent and real earnings fell by 0.1 percent.
Despite the loss of income, the Germans got richer overall last year, as they saved significantly more during the crisis and in some cases benefited from price gains on the stock exchanges. According to calculations by DZ Bank, the financial assets of private households are likely to have increased by 393 billion euros in 2020 to a record 7.1 trillion euros. Despite the crisis, that is an increase of almost six percent compared to the previous year.