Thousands of German industrial workers went out for several hours over the weekend in a wage dispute that escalated as leaders of Germany’s powerful IG Metall union warned of more strikes. happens if the employer does not improve their offer.
Europe’s largest industrial union is demanding an 8% pay rise for 3.9 million employees in Germany’s auto, metals and electricity industries to offset rising inflation. Demand for wages highest since 2008.
The sector is the backbone of Germany’s broader economy and a conduit for wage deals in other sectors.
Employer representatives have offered a one-time payment of €3,000 spread over 30 months, arguing that the companies themselves are being squeezed by rising energy costs and potential recession.
On Saturday night, employees of more than a dozen companies above Germany, which includes steelmaker ThyssenKrupp and auto suppliers Bosch and ZF, has begun a rollout program that the union calls a temporary warning. Each outage lasts several hours and will continue into early November at various companies across Germany.
A union official said the impact on production was limited, but the shutdown was an important symbol of workers’ determination.
“Employers’ refusal to participate in proper wage negotiations has triggered this escalation,” the union said in a statement over the weekend, adding that it would step up walking activity in the coming days.
IG Metall leader Jörg Hofmann had earlier warned the union would escalate the strike if the employer fails to come up with a better offer by November 9, when negotiations resume.
Wages in the euro area this year have fallen far behind inflationary, is expected to rise above 10% for the first time in the region’s history when October price data is released on Monday. This has left many workers significantly worse off in real terms.
Peer-Michael Dick, chief executive officer of Baden-Württemberg’s association of metal employers, described the warning strikes as “completely unnecessary” and warned they added an additional burden to workers. companies are already stressed.
Economists say persistently high inflation could increase the likelihood of a 1970s-style wage price spiral and spur European Central Bank increase interest rates to control inflation.
“Amid high inflation, which has resulted in significant losses in purchasing power, unions are likely to drive wage increases,” said Marco Wagner, senior economist at lending bank Commerzbank.
Eurozone wages rose 4% in the second quarter, slower than in the US or UK. But unemployment in the 19-nation bloc has fallen to a low of 6.6%, and labor shortages are growing in some countries, such as Germany, the Netherlands and Poland, according to Eurostat data. from August, the most recent figures available. This puts many workers in a stronger bargaining position.
Some employers have paid workers a lump sum instead of an annual raise. The German government has encouraged this by treating one-time payments as tax-free. Workers in the German chemical industry this month received one-time annual payments of 1,500 euros per year for the next two years as a result of a 3.25% increase in wages.
The ECB is closely monitoring eurozone wage growth after forecasting last month that it would rise from 4% this year to 4.8% next year. ECB President Christine Lagarde said in a press conference last week that this is likely to accelerate faster, saying: “Incoming wage data and recent wage agreements suggest growth in money wages may be on the rise.”
