Real wages rise, but where is the employment? A look at May 2025

Real wages rise, but where is the employment? A look at May 2025

A look at the current development of wages and employment shows that in May 2025 in Slovakia and beyond some trends are emerging. According to the dersi.stvr.sk, the average wages rose in all observed ten industries, which initially sounds pleasant. However, real purchasing power develops differently, since the inflation -adjusted real wages only climbed into eight sectors.

The wage growth, which varied between 0.4 and 11.2 percent, is particularly remarkable. The best figures could be booked in the catering area and in the accommodation industry, while in other industries there was a decline in employment. In the accommodation industry, employment grew by 1.2 percent and even 3 percent in the catering area, while the other sectors are not so good.

real wages and purchasing power in focus

To understand the relations, a look at real wages in Germany helps. The real wage index, which looks at the merits compared to price development, provides information about the purchasing power of the employees. According to Destatis.de, a positive rate of change means that the merits have increased more than prices. At the moment, many employees notice that this positive development has not always been given in recent years.

The nominal wages have increased throughout the EU, but purchasing power suffered. According to Tagesschau.de, the real wages have dropped in many EU countries, including Germany. The employees had to feel the cost increases by the energy price shock due to the geopolitical situation. The decline in real wages has an impact on consumption and thus on the entire economy.

an outlook on wage development

While certain industries, especially gastronomy and accommodation, benefit from a positive trend in May 2025, the prospects for the rest of the market are not so rosy. The fact that wage growth in these specific sectors is double digits promises a lot for the future. However, it remains to be seen whether this development can continue on a broad front, especially against the background of the inflationary challenges.