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WORKING IN GERMANY

German steelworkers agree 6.5 percent pay hike after strike

Tens of thousands of steel workers in western Germany will get a 6.5-percent pay hike this year - the biggest jump in three decades - in a settlement that could set the tone for industry as inflation soars.

An IG Metall Union flag on a bike in Leipzig on International Workers' Day on May 1st.
An IG Metall Union flag on a bike in Leipzig on International Workers' Day on May 1st. Photo: picture alliance/dpa | Jan Woitas

The agreed increase would come into effect “from August 1st”, the IG Metall union in the region of North Rhine-Westphalia said in a statement Wednesday.

The 68,000 steelworkers in the industrial region would also receive a one-off payment of 500 euros for the months of June and July, the union said.

The outcome of the negotiations was “the biggest increase in wages in the steel industry in percentage terms in 30 years,” said IG Metall boss, Joerg Hofmann.

Germany’s largest union, IG Metall launched a strike action at steelworks in the west in May after management failed to meet its demands for an 8.2 percent pay increase.

On Thursday at the peak of the movement, around 16,000 workers across 50 firms downed tools, the union said.

READ ALSO: Should foreign workers join a German union?

“Rising inflation” and the “good economic situation” of the steel industry were the basis for IG Metall’s demands.

Consumer prices rose at a 7.9-percent rate in Germany in May, a record for the country since reunification in 1990 driven by the outbreak of the war in Ukraine.

The smaller number of steelworkers in the east of Germany, who are also seeking an 8.2 percent pay boost, have yet to reach their own agreement.

Negotiations are currently taking place in a number of sectors. In the textile industry, 12,000 workers in the east of Germany sealed a 5.6 percent pay increase at the beginning of May.

Meanwhile, negotiations covering the auto industry, and mechanical and electrical engineering will begin in November.

Despite the agreed rise the onus was still on government to relieve the pressure on workers form rising prices “in the coming months”, IG Metall boss Hofmann said.

Significant wage demands have prompted concerns of a wage-price spiral, where rising pay sustains higher inflation.

The European Central Bank last week said it would raise its interest rates for the first time in over a decade this July as it seeks to stamp out price rises.

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STRIKES

Major German trade union wins pay hike, averting strikes

Germany's biggest trade union agreed Friday on wage hikes totaling 8.5 percent that are expected to cover almost four million workers facing soaring inflation, averting a major strike in Europe's top economy.

Major German trade union wins pay hike, averting strikes

The deal will be closely watched across the continent, which is facing spreading industrial action as employees demand large pay increases to cope with rising costs, particularly of energy.

The agreement between IG Metall union – which represents workers in Germany’s key metal and electrical sectors, and is seen a trend setter for setting wages nationwide – was reached early Friday after weeks of talks and walkouts.

The so-called “pilot agreement” in the southern state of Baden-Württemberg, which is expected to eventually cover about 3.9 million workers across Germany, lays out how the pay increase will be introduced in two stages, in 2023 and 2024.

It also includes a €3,000 payment to combat the impact of inflation.

“Employees will soon have significantly more money in their pockets – and permanently,” said Joerg Hofman, president of IG Metall.

The union had initially called for an eight percent increase over 12 months, the biggest hike since 2008.

Its members are from a vast range of key businesses, from automotive to electronics.

Workers have been ratcheting up pressure – with demonstrations, and a series of “warning strikes” at the end of October, which are walkouts for a limited duration, which often accompany salary negotiations in Germany.

READ ALSO: German industry workers to strike from Saturday

If no deal was reached, then the union was poised to launch more serious strikes lasting 24 hours.

While companies are under pressure to hike wages to cope with rising costs, there are fears that raising them too sharply could stoke already sky-high inflation.

READ ALSO: Jobs in Germany: Should foreign workers join a union?

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