Real wages in Austria: Slight increase despite inflationary pressure!

Real wages in Austria: Slight increase despite inflationary pressure!

In the current economic situation, the issue of real wages in the Eurozone has become more acute. Loud SN Austria is doing somewhat better than other EU countries, but progress is modest. Since December 2021, real wages in Austria have increased by around 0.6 percent. This is in contrast to countries such as Germany, Spain and Italy, where real wages are between 3 and 8 percent below the pre-crisis level in 2021.

However, the positive development in Austria is also clouded by deeper structural problems. The director of Agenda Austria, Treml, emphasizes that wages and salaries have been paid above the level achieved for years and cites falling productivity and increasing inflation as the main reasons for this problem. The most recent collective agreements concluded, for example for metal workers and railway workers, show that although progress has been made, there is also an imbalance that particularly affects commercial employees.

Inflation and the wage-price spiral

The pressure on wages is growing, and this is due, among other things, to the high price increases Destatis fuel wage demands. The analysis shows that the rate of change in consumer prices averaged between 0.3 and 2.2 percent from 2008 to 2020. However, from the third quarter of 2021, the changes increased to up to 8.6 percent, which has increased pressure on wages.

The economic conditions are anything but easy. There is a risk of a wage-price spiral in which rising wages fuel inflation, while the development of wages traditionally reacts to inflation with a time lag. These spiral dynamics are not only a challenge for workers, but also an indicator of overall economic stability.

Outlook for the coming years

There are different forecasts for the development of real wages in the EU countries for the coming years. A comprehensive analysis of Statista provides an overview of expectations up to 2025. These show that many countries face serious challenges in bringing their real wages back to stable levels.

The collective bargaining negotiations next year are of great importance as retail in particular is affected by the latest developments. In this context, Treml calls for wage restraint to promote the “mindset” and ensure sustainable economic stability. Comprehensive reforms are also necessary to permanently address the problems with rising inflation.

In summary, although Austria is recording a positive development in real wages, the path to a stable economic future presents many challenges that need to be overcome.