BERLIN (AP) — Germany’s largest union on Monday sought a 7% pay increase for millions of workers in negotiations due to start later this year, arguing that companies including carmakers and machine makers are in a position to to pay this.
The leadership of the IG Metall union said it is recommending a significant increase in demand for 3.9 million workers in view of “a continued high price level.” It says companies have well-filled order books and that even though prices are no longer rising as quickly as before, the one-off payments agreed in the latest settlement have been eaten up by inflation.
In the last round Following the wage talks, IG Metall and employers agreed in late 2022 to increases totaling 8.5% over two years, plus one-off payments totaling 3,000 euros (about $3,200) each, aimed at cushioning the impact of soaring inflation to catch. The government, wanting to tackle the impact of rising prices while preventing an inflationary spiral, was keen to promote such tax-free payments.
This time, IG Metall called for a 7% wage increase and a one-year deal. It said it understands that some companies are in a volatile situation, but argues that this does not detract from the overall soundness of the sector and the improving economic outlook.
In Germany, wage agreements are generally reached through negotiations between employer organizations and trade unions covering an entire sector, and an agreement reached in one region is generally applied nationwide. IG Metall’s current agreement expires at the end of September.
Annual inflation in Germany stood at 2.4% in May, compared to almost 9% at the beginning of last year.
The country’s economy, the largest in Europe, is struggling to generate growth. Employers have argued that the economic situation does not allow large wage increases.
