The profits of companies in Germany have increased significantly more than wages, according to a study by the Organisation for Economic Co-operation and Development (OECD). The study found that since the end of 2019, the profit per unit of companies has increased by 24%, while wage costs have only increased by 13%. This trend has contributed to high inflation rates, which have led to a decrease in real wages in almost all of the 34 OECD member states. However, the increase in the minimum wage in October 2022 has led to a significant increase in purchasing power for those in the lower income groups.
The study shows that the gap between profits and wages in Germany is larger than in other OECD member states such as France, Italy, Spain, and the United Kingdom. The high profits of companies have contributed significantly to the high inflation rates, which have led to a decrease in real wages. The study suggests that companies have enough financial leeway to increase wages, which would help mitigate the loss of purchasing power for those with low incomes and prevent an increase in economic inequality.
Despite having one of the lowest unemployment rates among OECD member states, the OECD’s economic outlook for Germany is negative. The high inflation rates are expected to continue to affect real incomes and savings, which will dampen consumption and lead to stagnation in the German economy in 2023. The study raises questions about whether the German labor market can continue to perform well in the face of these challenges.
In conclusion, the study highlights the need for companies in Germany to increase wages to prevent further economic inequality and to mitigate the effects of high inflation rates. The study also raises concerns about the future of the German labor market in the face of economic challenges.
