The recent rise in energy prices caused by the U.S. attack on Iran could also hurt workers’ income in German industry, a new study by the Leibniz Institute for Economic Research in Halle (IWH) shows. IWH economist Steffen Müller told “Der Spiegel” that a 10 % increase in energy costs typically lowers wages in affected German manufacturing firms by about 0.34 %. A sharp price shock can erode regular wage hikes, especially in energy‑intensive sectors.
The study draws on data from more than 20,000 companies over the period 2003-2017. It also reveals an asymmetric effect: when energy prices fall, firms do not pass the savings on to employees, whereas wages do adjust when costs rise. These effects tend to appear with a delay-wage changes are not seen after just a couple of weeks but only once the shock proves to be durable.
