Reuters - Video

Edition: US | UK | IN | CN | JP

Finance Videos

Germany toasts record wage growth

Tuesday, September 22, 2015 - 01:39

German real wages rose by 2.7 percent in the second quarter, the strongest increase since records began in 2008. As David Pollard reports, the data showed the strongest increases on a pre-inflation, or nominal basis, were in eastern Germany and in the unskilled, low-wage sector, suggesting the introduction of a minimum wage had an impact.

▲ Hide Transcript

View Transcript

You don't really need an excuse to drink beer in Germany, but if you did, more money in your pocket might do. With a new minimum wage at the start of the year, wages are up - and strongly, with the biggest increases in eastern Germany and the unskilled sector. Overall, it was the highest rise since records began in 2008, and the third quarter in a row of high wage growth. Plenty to toast as the famous Oktoberfest gets into full swing in Munich - especially if you're a worker. BGC Partners Mike Ingram. (SOUNDBITE) (English) MIKE INGRAM, MARKET STRATEGIST, BGC PARTNERS, SAYING: ''The labour market in Germany is tight and an unemployment rate of 6.4% on a historic basis is extremely low. And also you're seeing more strike activity, so clearly labour there feels it has some pricing power.'' An influx of new workers could undercut that power. As thousands of refugees and migrants head towards Germany, it's an open question whether it can cope with the extra burden. For now, it's still aiming for a balanced budget, according to the finance ministry. But the challenge is likely to escalate. (SOUNDBITE) (English) MIKE INGRAM, MARKET STRATEGIST, BGC PARTNERS, SAYING: ''You have to look at how they might fit into the jobs available which are being created. But it's clear that if the migrant crisis continues on its current trajectory, then it's simply going to be beyond Germany's capacity.'' Even so, German growth will continue upwards at 1.7 percent this year, according to the Bundesbank. And that's despite extra uncertainties like China. Though with no mention yet of something else that could spoil the party mood: the likely bill for German car giant VW's widening emissions scandal.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Germany toasts record wage growth

Tuesday, September 22, 2015 - 01:39