Real Wages: Germany Is Europe's Exception, the Supermarket Checkout Has Not Heard Yet

Good news, for once with numbers: according to the OECD Employment Outlook, Germany is the only one of Europe's five big economies where real wages are expected to rise throughout the period from early 2026 to early 2027. Italy, Spain, France and the UK are all forecast to see declines. Italy is hit hardest, with real wages expected to sit 1.9 per cent below their early-2026 level in the third quarter. The UK follows with a drop of up to 1.6 per cent.

Germany's lead has a sober explanation: the minimum wage rose 8.4 per cent at the start of 2026 to €13.90 an hour and is due to rise another 5 per cent to €14.60 in 2027. That helps most at the lower end, even with inflation estimated at 3.3 per cent in September. The German wage miracle is less a miracle than a line in the Federal Law Gazette.

Real wages are rising. The rent has heard about it and is preparing a statement.

Mind the small print. This is a forecast, and averages do not pay utility bills. Anyone living in a big city, heating with oil or burning a lot of diesel can end up with less in their pocket despite a pay rise. Economists measure purchasing power with impressive precision. Supermarkets still insist on charging individual customers rather than statistics.