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IG Metall: Eight percent more demand: Employers are key

Deal inflation compensation

IG Metall asks for up to 8% more wages and special taxes for companies

Warning shot in Ilsenburg Warning shot in Ilsenburg

The employees of Ilsenburger Grobblech GmbH participate in a warning strike

Source: pa / dpa / Matthias leg

Despite the crisis and inflation, unions see good earnings in companies. Employers, on the other hand, speak of irresponsible demands from IG Metall. Wage demand would have been almost significantly higher.

D.a IG Metall is the most powerful trade union in Germany. And traditionally it is the metalworkers who, with their wage demands, also give the signal to other sectors of the country. There is a great responsibility in this collective bargaining leadership. This year this is especially true. Because the economic situation is not only affected by the consequences of the coronavirus crisis and the far-reaching consequences of the war in Ukraine, but also by record inflation.

IG Metall boss Jörg Hofmann is trying to strike a balance with the recommended demand for a seven to eight percent wage increase decided by the trade union council. On the one hand, the 3.7 million employees of the metallurgical and electrical industry are expecting a steep wage increase after the poor closure of the Corona emergency last year. On the other hand, if collective agreements are excessive, the wage-price spiral threatens to really kick in, which would ultimately only result in even higher inflation.

Currently, the inflation rate in Germany is already 7.9 per cent and thus at the highest level in nearly 50 years. The Bundesbank expects inflation of 7.1 percent for the full year. Against this, the union leadership believes that the range of targeted wage increases is rather moderate. If inflation had been fully offset, the figure would have been double-digit, according to trade unionists. After all, this is the current year, which is by no means paid off with the one-time payment, and around 2023.

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Federal Minister of Labor Hubertus Heil (SPD)

Employers in Germany’s largest industry, which also includes the automotive industry and mechanical engineering, see the demand as irresponsible. Gesamtmetall chairman Stefan Wolf calls for more consideration for companies that complain about historical cost increases and have not yet reached the pre-crown level.

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In a survey conducted by Gesamtmetall, 94% of all companies said they were affected by the cost explosion, 80% substantially. Only one percent of all engineering and electrical companies are able to pass on cost increases through price increases to their customers. One in five societies see their very existence threatened by this development.

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The head of the trade union Hofmann views the situation in the sector much more favorably. In one survey, for example, works councils mostly confirmed that their companies have made good earnings.

The order books are fuller than ever. Hofmann also points out that this year employees only received a one-time payment due to the pandemic, which does not apply to the table, i.e. it does not mean a permanent salary increase. Employee expectations are now correspondingly high.

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Government press conference in Thuringia

staff shortages in schools

However, Hofmann also makes it clear that collective bargaining alone cannot compensate for high employee inflation. Rather, the state is also obliged to cushion the burden on the population, as has already been done with the two previous aid packages.

Each employee receives 300 euros in September and there is also 100 euros for each child. Hofmann points out that further steps are needed here. IG Metall is also pushing for a special tax for companies that are also benefiting from the current crisis. This is the case, for example, of the steel industry, which is currently capable of driving high prices onto the market.

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Yasmin Fahimi, President of the German Trade Union Confederation (DGB)

The board vote is not final, but will only be discussed by the regional wage committees in the coming weeks and then definitively confirmed by the board in July. As a rule, however, regional collective bargaining commissions no longer deviate from the recommendation of the board of directors. The peace obligation expires in October. Collective bargaining is likely to continue until November.

Federal Chancellor Olaf Scholz is aiming for concerted action by trade unions, employers and the government in the fight against inflation. Hofmann makes it clear to IG Metall, however, that his union is already showing a sufficient sense of responsibility with the current wage demand. If Scholz was hoping for voluntary wage moderation, IG Metall’s signal is likely to disappoint him.

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