Bloomberg News

German Industry Can Afford Bigger Wage Gains, Handelsblatt Says

April 11, 2012

German industrial companies can afford wage increases that exceed raises set for the public sector, Handelsblatt said, citing interviews with German economists.

A raise of more than the 6.3 percent over two years won by the Ver.di labor union for the public sector would be justified because companies are benefiting from increasing demand from emerging economies, the newspaper cited Ferdinand Fichtner, economist at the Berlin-based DIW economic institute, as saying.

Higher wages would boost German domestic demand at a time of subdued growth in Europe, Gustav Horn, head of the labor union-affiliated IMK institute, told the newspaper. Wage increases wouldn’t hurt German competitiveness, Horn said.

Growth would be restrained by a wage increase of 5 percent in the economy as a whole, the newspaper cited economist Klaus Zimmermann of the Bonn-based IZA institute as saying.

To contact the reporter on this story: Rainer Buergin in Berlin at

To contact the editor responsible for this story: James Hertling at

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