German Institute for Economic Research (DIW): Low-wage sector in Germany has fallen since 2015

German Institute for Economic Research (DIW): Low-wage sector in Germany has fallen since 2015

According to a report by www.faz.net:

The number of people in the low-wage sector in Germany has fallen significantly in recent years, which was confirmed by the German Institute for Economic Research (DIW) in a study on wage developments since 1995. The proportion of employees in the low-wage sector was 15.2 percent last year, which corresponds to the level in the mid-1990s. The introduction of the general minimum wage in 2015 and increasing demands from trade unions for higher wages are cited as the main reasons for this development. The analysis also shows that wages have increased across all wage brackets since 2013, but wage inequality has increased over the long period. The DIW points out that the proportion of households with low disposable incomes has not fallen in recent years, which is attributed to refugee migration since 2015.

As a financial expert, I analyze the effects of this development on the market and the financial industry. Reducing the low-wage sector signals an improvement in incomes and can lead to an increase in consumption. For companies, this potentially means increased sales and profitability. Rising wages could also encourage people to put more money into their savings accounts, which can have a positive effect on banks and financial institutions. On the other hand, increasing wage inequality could pose a challenge as it can lead to social tensions and injustice. There is also the possibility that rising wages will fuel inflation and influence central banks' monetary policy.

Overall, the development of the labor market and wages is a complex issue that brings with it both opportunities and risks for the financial sector. As a financial expert, I will continue to closely monitor developments to calculate possible impacts on the market.