The resulting price discipline also has constrained nominal wage gains in internationally tradeable goods industries. As workers have attempted to shift to other sectors, gains in nominal wages and increases in prices in nontradeable goods industries may have been held down as well. The process of price containment has doubtless become, to some extent, self-reinforcing. Lower inflation in recent years has altered expectations.
Without sustained improvements in labour productivity, higher nominal wages do not lead to sustainable improvements in real purchasing power, but only fuel inflationary pressures, thereby making it more difficult for the ECB to safeguard the purchasing power of all euro area citizens.