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Prices are rising - but so is wages: Largest wage increase in 13 years | Money | DR However, there is also a flip side to the coin when wages rise, according to the Danish Employers' Association. Of It has hardly passed anyone's nose that prices have risen enormously over the past many months. But it is not only prices that have taken a skyrocket. For the first of 2022, wages have risen by 3.8 percent compared to same last year, which is the largest wage increases in 13 years in the private labor market. Exactly that is the average hourly wage in DA's area. DA has over 25,000 member companies and is a main organization for 11 employers' associations, including the Danish Chamber of Commerce and Danish Industry. We have previously written that more demanded wage increases due to rising inflation. You can read more about this According to Anders Borup Christensen, chief economist at DA, the high wage increases are due to several factors. - This reflects the shortage that has characterized the Danish labor market in recent months. And then it is also connected with the rising we have seen in the Danish economy, he says. Among other things, the construction industry has been lacking. And it is especially this one that gets the average raised. Here, wages have risen by 4.4 percent in the past year. See the wage development in the graph below. However, one should not look too early, because the wallet will still contain less money at the end of the month than it has done before. by 3.8 percent, prices for the same period increased by 4.8 percent. So one more, and it weakens purchasing power. Since then, prices have risen even more, where in April was 6.7 percent, which is the largest increase in almost 40 years. Therefore, employees must fight to get even more, it sounds from 3F, which has over 260,000 members.- It is then uncomfortable to go to work and experience that the purchasing power of one's salary decreases. But it is a consequence of that has increased so quickly and sharply.- Our members must of course take cutlery to the situation out in the companies. Just as companies are trying to pass on the rising costs in the form of higher prices, our members must look at their rising costs and cover it in the best possible way, says Frederik I. Pedersen, chief economist at 3F. not something that knocks the bottom out of the employees' finances. Anders Borup Christensen, chief economist at DAHos DA, however, believes that the Danes are already well padded against the rising prices. - We have had an eight-year long period where real wages are increased by 13 percent. Now it drops by one percent, and it is not something that knocks the bottom out of the employees' finances, says Anders Borup Christensen, who is chief economist at DA. the private labor market - and not all Danes. For public employees, it looks somewhat worse. They give a wage increase of less than two percent, which weakens their purchasing power significantly. However, rising wages can also be a long-term problem for Danes, although more in wages sounds good now that prices are rising But in the long run, it could have a major impact on Danish companies. The Ministry of Finance predicted earlier this month that inflation will fall to a normal level again in 2023. In addition, the ministry also estimated that there will be wage increases. You can read more about this - It puts pressure on companies that are already under pressure. On top of that, there are now high wage increases, and this puts pressure on their competitiveness and their opportunities to compete in our export market, says Anders Borup Christensen. And it is not only competitiveness that can be affected. The development can keep pace with demand - and thus prolong it. This is what Nyheder's business correspondent, Jakob Ussing, says. , if it continues like this for a long time, as consumption can slow down so much that the whole economy goes into reverse, he says.- On the other hand, price increases increase the pressure for similar massive wage increases, but it could have the negative that so just The classic way of curbing interest rates is for central banks to raise interest rates, thus dampening demand. Many economists believe that central banks have started raising interest rates very late. Once it has reached its current level, it is difficult to curb it without landing on its stomach, says Jakob Ussing. a little speed and in that way reins, but without losing all speed, so more normal times can thus return.- Well noticeable without a shower of massive interest rate increases. But whether it is wishful thinking or realistic, the coming months will show, he says.