These foreigners will quickly learn the cost of living in Germany and what their colleagues get, I don't think it's a significant factor. What really keeps wages down IMO is the lack of high-margin/high-growth businesses, lack of German "unicorns", general risk-averseness of German capital (which can be explained by the previous two).
> IMO is the lack of high-margin/high-growth businesses
It's not really a German-only thing. Other than the US and China almost no other country currently has such things. EU is mostly traditional businesses and risk-averse investors.
Sure, relatively (compared to what one can have in the US) low salaries for software engineers is a EU wide thing. Some countries pay more some less, Germany is probably closer to the top if you consider EU.
