The agreement negotiated by IG Metall with employers has been designed to avoid triggering an inflationary spiral.
by Cécile Boutelet (Berlin, Correspondence)
In Germany, the large dreaded strike will ultimately not take place. Friday, November 18 in the morning, the IG Metall union and the employers announced that it had concluded an agreement on an increase in wages, after twelve hours of debate and five rounds of negotiations.
Valid only for Baden-Würtemberg, this “pilot” agreement should be adopted by other regions in the coming days. IG Metall claimed 8 % renegotiable increase in one year, due to record inflation, for the 3.9 million employees in the metal and electronic industry, central in Germany.
The agreement provides for a salary increase of 5.2 % in June 2023, followed by another, of 3.3 %, from May 2024, or 8.5 % over two years. Added to this is also a premium payable in two sections, with a total amount of 3,000 euros. The agreement is valid for two years. These premiums will be tax exempt, thanks to a measure adopted by the government in the last package of tax reductions, which allows companies to operate exceptional payments to their employees, up to 3,000 euros, exempt from taxes and contributions social. The device, advantageous for employers as well as for unions, has considerably lowered the pressure on negotiators.
powerful stabilization factor
Berlin feared that a sharp increase in wages in industry strengthens inflation and bankruptcy of companies, or does not take a dangerous pricing-process-forest spiral which is spread over the entire economy . The increase in wages in stages and premiums were methods favored by economists to avoid such effects, already used during negotiations in chemistry. The risk of a spiral now seems largely defused. A sign of the subject’s political importance, the Chancellor, Olaf Scholz, spoke about the outcome of the negotiations, rejoicing the results. An exception to the principle of the autonomy of the social partners, sacrosanct across the Rhine.
ig metall welcomed the compromise. A technician employee should obtain, thanks to the increases and unique payments, an additional 7,000 euros in total by the end of the period, underlined Jörg Hofmann, president of IG Metall, Friday morning. However, the increase is not enough to compensate for inflation, currently greater than 10 % across the Rhine, and which should be extended next year at a high level.
The salary agreement however contributes to “stabilizing the economic situation”, maintaining the purchasing power of the employees, added the union official. Ig Metall, which negotiated for sectors that pour the highest wages, is a powerful factor of economic and social stabilization across the Rhine.
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