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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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WORKING IN GERMANY

6.6 million people ‘set to benefit from €12 minimum wage’ in Germany

According to a new study, Germany's new €12 minimum wage will benefit more than 6.6 million people when it comes into force on October 1st.

6.6 million people 'set to benefit from €12 minimum wage' in Germany

Currently, around 6.64 million workers in Germany earn less than €12 gross per hour, according to new statistics published by the Hans Böckler Foundation’ Institute of Economic and Social Research (WSI), a trade union-linked research foundation. 

Among those now benefiting from the increase, 2.55 million are in full-time employment, according to the WSI. Nationwide, just under one in ten full-time workers and around 20 percent of part-time workers earn less than €12 per hour. Among mini-jobbers, the figure is as high as 80 percent.

Under a flagship policy of the Social Democrats (SPD), Germany’s national minimum wage is set to increase from €10.45 to €12 per hour on October 1st. The last increase was on July 1st this year. 

READ ALSO: ‘Biggest pay rise of their lives’: Germany hikes minimum wage to €12

The move is “a ray of hope in these difficult times” that will help low-paid workers handle the rising cost of living, Stefan Körzell, an executive board member of the German Trade Unions Federation (DGB), said on Tuesday. 

However, the DGB said more controls were needed to ensure that workers actually receive the statutory minimum wage. According the trade unions, employees across numerous sectors are currently earning less than the legal minimum. 

“The federal government must significantly increase the staffing of the responsible authority, Finanzkontrolle Schwarzarbeit,” Körzell said.

In addition to the wage hike, unions are also calling for more relief from the government to help cushion the impact of the rising cost of living. 

In particular, they are advocating for energy price flat rate and an energy price cap that could be paid for by skimming off the “excess profits of the large energy and mineral oil companies”, Körzell explained. 

From Wednesday, the DGB will run information campaigns on the minimum wage increase at more than 230 railway stations and market places throughout Germany.

READ ALSO: EXPLAINED: Will Germany set a gas price cap and how would it work?

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