The real impact of wage fluctuations can only be appreciated when “nominal” (i.e., actual) wages and changes in the cost of living are taken into account. For example, if a worker’s nominal wages rise during a given period but the cost of living rises even more, then his or her “real wages” have declined. This table shows how these factors interrelate. A period of relative economic stagnation occurred after 1873; here, we can see its effects in the years 1875–1880: although the cost-of-living index declined somewhat in this half-decade, indicating a period of price deflation, nominal wages declined even more. Hence, German workers’ average real wages declined from 578 to 524 marks, and the index of real wages (taking 1895 prices as 100) fell from 87 to 79. That index rose quickly during the “mini-boom” of the last half of the 1880s, and then more slowly during the “mini-bust” of the early 1890s. These increases may have been small, but except for the half-decade from 1875 to 1880 they were never negative. Hence, historians have revised previous assessments that spoke of a “Great Depression” during these years.

The period 1873–1896 was both preceded and followed by boom years, leading many contemporary Germans to perceive these intervening years as a time of uncommon hardship. Note the dramatic increases in both nominal and real wages in the period 1895 to 1913, during which time the index of real wages rose 25%, from 100 in 1895 to 125 in 1913. These statistics nevertheless obscure important variations in the earning potential of workers in different economic sectors and regions of the country. They also obscure the ever-present danger of calamity if unemployment, injury, sickness, or the death of the primary breadwinner caused a loss of earnings.