Real wages

Inflation reduced real wages: even a worker whose pay stayed the same could buy less as prices rose. The government helped finance the war by printing money, contributing to the loss of its purchasing power. Food became increasingly unaffordable, while unemployment added to insecurity.

Real wages rose by about 25% between 1925 and 1928. Real wages measure purchasing power, not simply the number of marks paid: if wages rise faster than prices, workers can afford more food, clothing and other goods.

The working week rose from about 43 to 47 hours, while real wages remained below their 1928 level until 1938. Food prices were about 20 per cent higher by 1939. A skilled worker with increased earnings might cope with these prices better than a poorly paid labourer.

If pay remained unchanged while food and other necessities became more expensive, a family could afford less. Its real wages, or purchasing power, had fallen.