Wages only increased slightly in 2020

• Smallest increase in wages since 2009
• In the manufacturing and hospitality sectors, the median is even falling
• The coronavirus effect in relation to the median wage might be 69 euros
• Differences between east and west are falling, but are still clear

20 Jul 2021 | Press Release No. 27

The median wage of all full-time employees liable to make social security contributions was € 3,427 last year. This means that wages and salaries increased by € 26 in comparison with 2019, the smallest increase since 2009. In that year, wages only increased by € 20 due to the financial and economic crises.

Different sectors are affected differently. In the manufacturing sector (- € 44) and the hospitality sector (- € 79), the median wages even fell in comparison with the previous year. On the other hand, there was an increase in wages in insurance services (+ € 111), in the health and social sector (+ € 80) and in education (+ € 77).

The heavy use of reduced hours compensation in particular caused the increase in wages to slow down significantly last year. Other causes of the weaker increase are the absence of special bonuses and the suspension of pay rises.

Coronavirus effect: without the pandemic, a higher wage would be likely

The Federal Employment Agency calculates the “coronavirus effect” at € 69. Experience shows that wages would have undergone an additional increase by this amount if it hadn’t been for the pandemic. The effect is calculated by extrapolating the media wages of past years.

A higher wage for well-trained workers and for employees in large companies

Irrespective of the pandemic, professional qualifications play a major role in determining the level of the wages. For employees with an academic qualification, the median is € 5,265 and for employees with a recognised vocational qualification € 3,300. Employees without a vocational qualification, on the other hand, achieve just € 2,515.

The size of the company also determines the wage. In large companies with 250 or more employees liable to pay social security contributions, the media is € 4,259 at the highest; in micro-enterprises with less than ten employees liable to play social security contributions, it is € 2,523 at the lowest.

Difference between east and west becomes smaller

The differences between east and west are still high, but the gap is continuing to close. In West Germany, the median of € 3,540 was € 650 higher than the level of the East German states incl. Berlin (€ 2,890). In 2019, the difference was still € 699.

Wage atlas with results by occupation

At the same time, the Federal Employment Agency’s wage atlas has also been updated. The wages for all occupations can be accessed there.

Methodological notes

The Federal Employment Agency always records the wages for all full-time employees on the key date of 31st December. The data are based on the employers’ registration of their employees for social security. As wages and salaries are only reported up to the contribution ceiling for pension insurance, which was € 6,900 in West Germany and € 6,450 in East Germany last year, it is not known how high the actual wage was for all employees. Therefore, the Federal Employment Agency identifies the median wage, which means that half of the employees achieve a wage below this median wage, and the other half achieve a wage above it.

 

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