German salaries up 3% as savings increase
NEW DATA indicates that, while salaries around Europe are falling, in Germany they are up on average more than 3 per cent.
Official figures released yesterday show the biggest spike in nearly four years in the last quarter, up by 3.2 per cent year on year. In addition, German consumer sentiment hit a five-year high heading into November.
That news has given German economists hope domestic demand will go some way to make up for an economic cool-off and drop in German exports.
After years of pay restraint, Germans unions have been securing significant rises in pay agreements since earlier this year.
In March public sector workers got a 6.3 per cent increase over two years. In May the IG Metall union – with nearly four million members in Germany’s successful machine and auto industry – negotiated a 4.3 per cent pay rise, the highest in 20 years. IG Metall pay deals have a tradition of setting benchmarks in subsequent pay talks.
Detailed figures released by the Destatis federal statistics office yesterday showed the highest pay rise of 4 per cent in the education sector, closely followed by manufacturing with 3.9 per cent. The lowest pay rise of 1.7 per cent – in security, cleaning and other agency staff – is more in line with average pay rises in the past years.
Separately, the Bundesbank released figures yesterday showing that Germans have amassed more money than in their post-war history.
The Frankfurt-based central bank said the country’s 82 million citizens had amassed €4,811 billion by the end of the third quarter. At about €60,000 per head, the total was up €9 billion on the second quarter. Some €992 billion is lodged as cash, the rest as stocks, pensions and other investments.
The bank said it has noticed a shift away from shares and other riskier investments in favour of regular savings accounts – even at the cost of inflation.
A separate study showed that younger Germans have become a generation of savers.