Unions fret eastern Europeans will hit wages

Trade unions are threatening major protests unless Angela Merkel’s coalition government introduces a minimum wage for temporary jobs in Germany to prevent foreign workers undercutting salaries.

Unions fret eastern Europeans will hit wages
Photo: DPA

From May 1, Germany has to open up its labour market to the citizens of eight European Union member countries. Fearing that a flood of workers from eastern Europe, where wages are lower, will push down earnings in Germany, unions and socialist The Left party are demanding a minimum wage to guard German workers.

The Left party parliamentary leader Gregor Gysi warned that without a minimum wage, Germany could see outbreaks of racism and xenophobia as workers and the unemployed saw jobs flowing to lower-paid eastern Europeans.

“I don’t want to see caravans in which nothing but Romanians or Polish are housed who work here under grubby conditions and wages of which we have to be ashamed,” he said.

At the same time, jobs for Germans would be lost, he said.

“Then we have xenophobia and racism, which won’t be helpful at all,” he said.

All parties therefore should take responsibility and work together towards a minimum wage.

Michael Sommer, the leader of the Confederation of German Trade Unions (DGB) meanwhile stepped up pressure, threatening that workers would begin a major campaign unless the government acted.

“That will lead to an immense downward pressure on wages in Germany,” the DGB boss said of the scrapping of present restrictions on EU workers moving to Germany.

If the government did not tackle this issue, “we will increase the pressure in the new year and accompany legislative procedures on temporary work with campaigns,” Sommer said.

“Either the government acts or we will act,” Sommer said. “We have to have a legal regulation before May 1, 2011, at least for casual work.”

While there are some minimum wages in specific sectors, no national minimum exists. The unions are particularly worried about low-paid casual jobs.

There was a “unique blockade situation in federal government,” Sommer said. The pro-business Free Democrats (FDP) supported equal pay for equal work, and the conservative Christian Democrats and Christian Social Union were receptive to a minimum wage in industry, yet each party rejected the other’s position, Sommer said.

Frank Bsirske, head of the services union Verdi, has likewise vowed action in the event that the government has not pressed ahead with stronger minimum wages by May.

“I assume that we, along with employers and their associations, with employees and workers’ councils, will make it clear how important legal regulations are if the FDP sticks to its resistance.”

Employers were prepared to pay fair wages, he said. They were threatened by “wage dumping” in which firms slash wages and prices to undercut competition.

DAPD/The Local/djw

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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.

German steelworkers agree 6.5 percent pay hike after strike

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.