Engineering News

German unions vow to push for big wage gains
Sat Jan 6, 2007 9:36am ET

BERLIN, Jan 6 (Reuters) - Leading German unions said over the weekend they plan to push for substantially higher salary increases in 2007 amid a robust economy, soaring corporate profits and higher taxes.

The head of chemicals, mining and energy union IG BCE, which represents 770,000 workers, said in a newspaper interview on Saturday that the limited wage increases of past years had helped fuel the German economic recovery and that now it was time for payback.

"Employees now have a right to enjoy the fruits and everyone knows that, including the employers," IG BCE chief Hubertus Schmoldt told the Hamburger Abendblatt.

Wage talks in the chemicals industry are due to begin later this month, while negotiations in the metals and electrical sectors as well as the construction industry are due to start in April.

Later in the year talks will take place in the retail and insurance sectors.

A regional leader of Germany's powerful IG Metall union, which represents some 3.4 million workers in the metals and engineering sector, told German weekly Der Spiegel that employers should prepare for higher demands this year.

"Last year we asked for a five percent increase and received three percent, said Detlef Wetzel, IG Metall chief for the big German state of North Rhine-Westphalia.

"This year our demand will be higher and the end-result must be higher, too."  

Bert Ruerup, the head of the German government's panel of economic advisers, said he would not rule out a 4 percent or higher wage increase in the metals sector.

Wage deals signed by IG Metall are often used as a gauge for other sectors of the economy.

German wages have risen more slowly in recent years than in other countries in the euro zone, helping contribute to a surge in corporate profits and improved competitiveness of German firms.

With the German economy growing at its highest rate in six years and a three percentage point increase in value-added tax (VAT) this year hitting the purchasing power of workers, unions are telling employers that it is time to pay up.

The European Central Bank, which raised interest rates to a five-year high last month, will watch the wage talks closely for any signs that lucrative deals could spur inflation.

Source: Reuters

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