German real wages projected at 0.7% in 2026, Handelsblatt reports citing the WSI Archive

The WSI tariff archive is the union-affiliated body that tracks collectively agreed German pay settlements, and its annual real wage projections derive from the stock of existing negotiated deals rather than a forecast of new rounds, so the figure says as much about the maturity of current settlements as about bargaining power. Read against the sequence of recent years, where a sharp real wage squeeze during the inflation spike gave way to a recovery as inflation fell faster than negotiated pay, a modest positive projection signals the catch-up phase largely exhausting itself, with settlements now settling close to productivity-compatible rates. The transmission channel that has mattered is the ECB wage tracker and services inflation: negotiated pay growth running in the low single digits has historically been the condition under which the doves carry the argument on services persistence, whereas any re-acceleration in new rounds would reopen it. The distinction worth drawing is between agreed wages, which WSI measures, and effective earnings including drift and bonuses, which can diverge materially at turning points in the labour market. The follow-ons are the outcome of the next major sectoral rounds and the official wage data against which the projection will eventually be benchmarked, along with any revision as inflation assumptions shift.