WSI Forecast: Collective Bargained Wages in Germany Set to Rise More Strongly Than Prices in 2026

The institute refers to the collective bargaining rounds concluded so far as well as to agreements already in place that will take effect later in the year. Several million employees in various sectors are expected to benefit directly from the agreed staggered increases and one-off payments.

However, not all collective bargaining negotiations have been concluded by any means. According to WSI's assessment, further, in some cases major, collective bargaining rounds are scheduled in the coming months. Their outcome will be decisive in determining whether the projected wage development actually materializes and whether the purchasing power of broad groups of employees can be secured by the end of the year.

The head of the WSI Collective Bargaining Archive, Thorsten Schulten, pointed to the negotiations still open and the uncertainty about further inflation developments. He said: "Da nach den jetzigen Prognosen auch die Inflationsraten noch etwas höher ausfallen werden, hängt es von den noch offenen Tarifrunden ab, ob am Ende des Jahres die Kaufkraft gesichert werden kann."

Economic Background

According to WSI, the projection takes into account both linear increases in collectively agreed pay and one-off payments that have been agreed in several sectors in recent months. These include, among others, lump-sum payments as well as tax- and contribution-free inflation compensation payments, which have a dampening effect on net wage statistics.

The institute also points out that development varies considerably between sectors. In some branches of the economy, the agreed increases are significantly above average, while in others only moderate increases have been achieved so far. The respective terms of the collective agreements also differ in some cases considerably.

For overall wage development in the economy, it is also significant that not all employees benefit from collective agreements. In sectors without industry-wide collective agreements, wages are often oriented toward collectively bargained developments without replicating them exactly. However, WSI expects that the collectively bargained trend will have broad positive effects on general wage dynamics.

Differences Between Sectors

The forecast stands in the context of a wage round that has been noticeably felt for two years in Germany, in which employees and unions sought to compensate for rising prices through higher settlements. Political debates over relief on energy costs and social contributions also shaped the discussion on the real purchasing power of workers.

The WSI calculations are updated annually on the basis of the collectively bargained agreements known by that time. They serve business, politics, and the social partners as a benchmark for further wage development and are observed internationally, for example by European trade union confederations and comparable research institutes.

Overall, the projection for 2026 paints a picture of sustained, albeit slightly moderated, wage dynamics. Should the outstanding collective bargaining rounds deliver increases similar to those already concluded, a clearly positive result for the purchasing power of collectively bargained employees would be expected arithmetically – provided inflation does not develop more strongly than forecast.

Outlook for the Second Half of the Year

WSI announced that it would update the projection over the course of the year as soon as further collective agreements are available. The next more comprehensive assessment is expected after the conclusion of the major collective bargaining rounds in the autumn months.