Germany: Electrometallurgical workers to get pay rise

Employers and unions in Germany announced a collective 8.5% pay rise deal for more than 3.9 million electrometallurgy workers from Thursday to Friday.

A pilot agreement concluded in Baden-Württemberg (south), valid in other German regions, provides that the increase will take place in two stages in 2023 and then in 2024, the powerful union IG Metall indicated in a press release, after weeks of heated negotiations and several walkouts across the country.

“Employees will soon have significantly more money in their pockets – and this in a sustainable way,” welcomed Jörg Hofmann, head of IG Metall, quoted in the press release. Received an “inflation bonus” of 3,000 euros. The union initially demanded an 8% wage increase over twelve months, its strongest demand for this strategic sector in Europe’s leading economy since 2008.

It includes thousands of automotive, electronics and machine tool companies, and negotiations in electrometallurgy are specifically explored. Workers in Germany stepped up the pressure: first through several weeks of demonstrations, then from October 29 with “alert strikes”, coordinated walkouts of limited duration, which often accompanied wage negotiations in this country.

If employers and unions do not reach an agreement, severe 24-hour strikes could threaten the country. “We will not hesitate to strike, the order books are full and there is no excuse not to win,” union representatives had warned at the start of talks in September.

Employers’ representatives initially considered the scale of the wage increase unrealistic, considering the risk too high: “A social conflict would have caused even greater damage,” employers’ organization Gesamtmetall estimated in a press release. “It will ultimately be an expensive deal, but now we can focus on our work and do our part to overcome the announced recession as quickly as possible,” the organization added.

Its president, Stephen Wolf, had warned of the burden represented by union demands, with many industries already buckled under the cost of energy. “Some are struggling to survive,” he warned. The contract provides for a 5.2% salary increase in June 2023, followed by a 3.3% increase on May 1, 2024.

The deal could send a signal to other branches that negotiate or negotiate salaries, such as the civil service. For around 2.5 million workers in the sector, the Verdi union is asking for a 10.5% increase. In Germany, wage increases are negotiated between unions and employers on a branch-by-branch basis.

The standoff came as inflation in Europe’s biggest economy surpassed 10% in October – unheard of since the early 1950s – due to high energy costs caused by Russia’s war in Ukraine.

After a surprise increase in gross domestic product (GDP) growth of 0.3% in the third quarter, Germany faces tough months ahead: Berlin expects a 0.4% drop in GDP and a 7% drop in inflation in 2023, according to the latest government projections. . As in other European countries, falling purchasing power in Germany is creating discontent and social tensions, resulting in demonstrations against the high cost of living.

Olaf Scholz’s government has unveiled a massive envelope of more than 200 billion euros to provide relief to households and businesses, including targeted aid payments for the most vulnerable and the implementation early next year of subsidies that will cap energy prices until spring 2024.