companies offer higher wages to attract workers amidst staff shortages
In 2023, there was good news for private-sector employees in terms of their earnings. The main reason for this improvement was the increase in the minimum wage. This change didn’t just help those earning the least; it actually boosted salaries across different levels.
One big reason for this wage hike was that many companies faced staff shortages. They struggled to find enough employees.
To attract more people, companies started offering better pay. They also converted many part-time jobs into full-time positions.
This change was important because it helped people earn more, especially when prices of goods and services (inflation) were high. Inflation remained a big issue for the second year in 2023.
When there aren’t enough workers available, companies have to pay higher wages to attract and keep employees.
This happened in many different industries, not just for new workers but also for people who were already working. The higher wages were a way for companies to fill open jobs and stay competitive with other companies.
The data from the Ergani information system shows some interesting numbers. The average monthly gross wage (that’s the amount before taxes and contributions) in 2023 was €1,251.
This was an increase of about 6.4% from €1,176 in 2022. This amount is the highest in the last ten years. But, it’s still not as high as it was before the financial crisis hit.
Even though wages increased in 2022 and 2023, inflation was still a problem. The average inflation was 9.6% in 2022 and 3.5% in 2023. This means that the rise in the cost of living was more than the increase in wages over these two years.
Thanks to the higher minimum wage, there was a shift in how many people fell into different income groups.
In 2023, fewer people (15.45% less) were earning up to €800 gross per month. However, this group still made up a significant portion, about 31%.
More people started earning over €800. The biggest increase was seen in those earning more than €3,000 and those earning between €1,501 and €2,000 per month.