German wages again rose at a faster pace than inflation in the first quarter, with employees earning an inflation-adjusted 1.8% more than in the same quarter last year, official figures showed on Thursday.
When wages rise while inflation remains at moderate levels, it increases the purchasing power of workers, a development seen in Germany over the last three years.
Consumer prices had surged after Russia invaded Ukraine in 2022, but inflation has since dropped to more moderate levels, though the Iran war has been driving up costs again.
The last drop in real wages - which are adjusted for inflation - was recorded in the first quarter of 2023.
Malte Lübker, wage expert of the Hans Böckler Foundation, which is affiliated with Germany's Green party, said the current positive trend could reverse in the wake of the war in Iran.
This would be particularly tough for employees as real wages had stagnated overall from 2020-2025, he argued.
Nominal wages - which are not adjusted for inflation - rose by 4.1% in the first quarter, while consumer prices grew by 2.2%, according to the federal statistical office.
This meant a rise in real wages by 1.8%, slightly lower than the 1.9% growth seen in the previous quarter.
Wages rose most in mining at 6.9%, followed by the finance and service sector with 6.5%. The lowest wage rises were seen in construction at 2.9% and civil services at 0.1%.
Low earners benefited from a rise of the national minimum wage, which was increased to €13.9 at the start of the year.
The bottom fifth of full-time workers saw nominal wage growth of 7%, while the top fifth saw a 3.5% increase.
