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WORKING IN GERMANY

Inflation wipes out high wage increases in Germany last year

Germany's Federal Employment Agency (BA) recorded a significant rise in wages last year - but not enough to compensate for high inflation.

Published: 25 July 2024 15:20 CEST
Euro notes and coins
Euro notes and coins. Photo: picture alliance/dpa | Monika Skolimowska

The median salary of all full-time employees subject to social security contributions in Germany was €3,796 per month in 2023.

Compared to 2022, wages and salaries have therefore risen by an average of €150 euros – or 4.1 percent.

According to BA, this rise can partly be explained by a spate of strike actions and collective bargaining last year. With the cost of living rising significantly, workers across several industries fought for high pay increases to compensate for inflation. 

However, despite some wins for Germany’s major unions, significant inequalities in earnings still remain, particularly when it comes to gender and location. 

While the median salary for men was just over €3,930 in 2023, women earned around €3,563 – a difference of €367. This was a slight increase compared to 2022, but shows an improvement compared to 2019, when the difference was €443.

READ ALSO: Five things to know about salaries in Germany

In terms of regional differences, the northern port city of Hamburg had the highest-earning residents while just down the coast in Mecklenburg Western-Pomerania, people earned the lowest. 

The highest median salaries were achieved by full-time employees in Hamburg at €4,304, followed by well-heeled Baden-Württemberg at €4,134 and Hesse at €4,087.

On the other end of the spectrum, three former East German states had the lowest-paid employees. In Mecklenburg-Western Pomerania, the median salary was €3,098, in Thuringia it was €3,109 and Saxony-Anhalt it was €3,152.

How much employees earned also depended heavily on their qualifications.

While people without a vocational qualification earned €2,831 on average, employees with a recognised vocational qualifications earned €3,658. Graduates were among the highest earners, taking home a median salary of €5,688 per month.

READ ALSO: The best-paid jobs you can get without a university degree in Germany

Pay also tends to increase as employees get older, BA reported.

Employees under 25 earned €2,897 on average, while 25 to 54-year-olds earned €3,860. Median salaries for employees over the age of 55, meanwhile, stood at €3,954 per month.

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IMMIGRATION

Which countries have an immigration deal with Germany?

In a move to encourage skilled immigration into the country, Germany has signed two new migration pacts with Kenya and Uzbekistan. Which countries have similar deals with Germany - and what do they mean?

Published: 16 September 2024 12:29 CEST
Which countries have an immigration deal with Germany?

Germany’s urgent search for skilled workers is well known – and over the past few years, the government has been throwing everything at the problem. 

One of the most notable attempts to tackle labour shortages is the Skilled Worker Immigration Law, which came into force in phases in 2023 and 2024. Among other things, this new law loosened the salary requirements for Blue Card holders, created a new points-based visa for jobseekers, relaxed rules for international students and paved the way for easier family reunification.

With so many big changes coming into force with the Skilled Worker Law, far less attention has been paid to a series of pacts that the government has been signing with non-EU countries around the world.

Nevertheless, these deals are a cornerstone of the government’s attempts to get young, qualified workers into the country, and they’re likely to have a significant impact on immigration to Germany in the coming years. 

READ ALSO: 8 things to know about Germany’s new skilled worker immigration law

Who currently has an immigration deal with Germany? 

Back in December 2022, German Foreign Minister Annalena Baerbock signed the first of its new immigration deals with India, paving the way for easier mobility between the two countries.

It was the outcome of several months of intensive negotiations and covered employment for skilled workers in both the scientific and cultural sector, as well as students and trainees. 

At the time, around 200,000 Indians were living in Germany, including around 34,000 international students. By the end of 2023, this had shot up to 246,000, suggesting that the migration deal was already having a profound impact.

READ ALSO: ‘Germany needs you’ – Labour Minister’s plea to skilled workers from India 

The next migration deal was concluded in December 2023 with Georgia – a country that is currently applying for EU membership. At the same time, the eastern European country was reclassfied as a safe country of origin, meaning asylum applications from Georgia would be generally denied. 

Previously, around 15 percent of rejected asylum applications in Germany had come from Georgia and Moldova – a number that dropped significantly after the new deal was announced. As with India, the aim of the deal was to improve routes for skilled migration, though with a population of just 3.7 million, Georgia is a far smaller country.

William Ruto Olaf Scholz

German Chancellor Olaf Scholz (R) and Kenya’s President William Ruto shake hands at the end of a joint press conference. Photo: Tobias SCHWARZ/AFP.

At the start of 2024 came the next two deals with Morocco and Colombia, deepening Germany’s ties with the populous African and Latin American countries. In a visit to Morocco in January, Interior Minister Nancy Faeser (SPD) pledged to work more closely with her Moroccan counterparts on migration and other domestic issues.

The Colombia deal also reflects Germany’s recent attempts to woo young people in Latin American countries to bring their qualifications and expertise to Europe’s largest economy. Back in June 2023, Labour Minister Hubertus Heil (SPD) signed a “declaration of intent” with Brazil “to promote the mutual exchange of skilled workers”.

READ ALSO: How Germany is partnering with Brazil to recruit more skilled workers

Though this stopped short of a full migration pact, the aim was to encourage some of the 2.5 million qualified nurses in Brazil to come and work in Germany’s struggling care and health sectors. 

Most recently, this September, two further deals were concluded with Kenya and Uzbekistan. Celebrating the Kenya deal, Chancellor Olaf Scholz pointed to the fact that the country has “an unbelievable amount of IT expertise” within the population: an area of the workforce that Germany is desperate to strengthen.

According to the Interior Ministry, Germany is currently in the process of thrashing out additional deals with Ghana, Kyrgyzstan and the Philippines. An upcoming migration pact with Moldova has already been largely implemented.

What do the migration pacts say?

Though each of the migration agreements has its own regional inflections, all of them broadly cover two main objectives: encouraging skilled workers, students and trainees to come to Germany, and helping the government send back those who are living here illegally.

When it comes to the former, this involves offering fresh routes for people from those countries to find skilled employment or a placement for studies or vocational training in Germany. Many of the countries Germany has deals with have younger populations with higher unemployment rates. 

With the latter, Germany’s partner countries generally agree to loosen up their rules for accepting illegal migrants back into the country, as well as helping identify who might be in Germany without a permit.

In the case of the Kenya deal, for example, the Interior Ministry noted that Kenya was the first country south of the Sahara to agree to help identify irregular migrants through biometric data. Additionally, the Kenyan government has agreed to accept expired passports and ID cards to make it easier for Kenyans who have been in Germany for several years illegally to return home. 

READ ALSO: Germany and Kenya strike labour migration deal

Speaking to regional media outlet BR24, migration researcher David Kipp said it would take time for Germany to see the positive effects of the new pacts. However, Kipp believes that they could play an important role in Germany’s efforts to combat its labour shortages.

In the case of India – the earliest of the recent migrations pacts – the fact that around 50,000 Indian citizens came to Germany within the first year alone demonstrates the country’s pull for skilled migrants, Kipp added.

However, the researcher believes that other deals – such as those between the EU and Egypt and Tunisia – are likely to have a larger impact on curbing irregular migration. That said, these deals have been criticised for encouraging human rights abuses, such as Tunisia’s recent “pushbacks” of irregular migrants into the surrounding desert. 

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