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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

EXPLAINED: The German industries ‘most affected’ by skilled worker shortage

Germany's shortage of skilled workers has reached a new high with almost half of firms struggling with staff shortages, according to a survey.

EXPLAINED: The German industries 'most affected' by skilled worker shortage

In July, 49.7 percent of companies surveyed by the Munich-based Ifo Institute said they were affected by the lack of skilled workers. 

This is the highest figure since researchers launched their quarterly survey in 2009. The previous record was 43.6 percent in April.

“More and more companies are having to cut back on business because they simply can’t find enough staff,” said Stefan Sauer, a labour market expert at the ifo Institute.

“In the medium and long term, this problem is likely to become more severe.”

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Since the survey started, the problem has increased significantly. At the beginning, around 10 percent of businesses reported being affected by worker shortages. But by 2019 this had climbed into the range of around 30 percent. 

The Covid crisis caused a temporary slump, but since the beginning of 2021, numbers have been rising significantly.

Service providers most affected

The service sector is the most affected with 54.2 percent of companies saying they are struggling to fill vacancies, up from 47.7 percent in April. Within this group, accommodation and event industries came in above this sector average at around 64 percent. In warehousing and storage, 62.4 percent of firms were affected. 

The service sector is followed by manufacturing, with 44.5 percent of companies saying they can’t find staff. Within that group, 58.1 percent of food manufacturers said they faced problems caused by staff shortages. Around 57 percent of manufacturers of data processing equipment and of metal products are also having difficulty finding qualified staff.

In the retail sector, 41.9 percent of companies say they have problems with a lack of staff. In construction that figure is 39.3 percent and in wholesale, it’s 36.3 percent.

The pharmaceutical and chemical industries report the lowest shortage of skilled workers, with 17.2 and 24.1 percent of companies respectively reporting that they are affected by staff shortages.

The automotive industry is also below average with 30.5 percent of firms reporting issues with staffing, as is mechanical engineering, with 43 percent.

Germany’s labour shortage is causing major concerns. A report by the IAB Institute for Employment Research from earlier this year found 1.74 million vacant positions across the country. 

The president of the German Confederation of Skilled Crafts and Small Businesses, Hans Peter Wollseifer, recently spoke out about the issues. According to Wollseifer, the skilled crafts sector in Germany alone lacks at least a quarter of a million qualified employees.

Meanwhile, between 15,000 and 20,000 apprenticeship places remain unfilled every year, signalling problems for the future. 

As The Local has been reporting, the government is pushing ahead with plans to reform immigration law in a bid to attract talent from abroad to fill jobs.

“We want to make it easier and faster for foreign skilled workers to find their way to Germany,” said Interior Minister Nancy Faeser and Labour Minister Hubertus Heil (both SPD) recently.

The plans for a reform of immigration law could be presented as early as autumn.

READ ALSO: 

Vocabulary

Skilled workers – (die) Fachkräfte

Labour market – (der) Arbeitsmarkt

High/peak – (der) Höchststand

Service providers – (die) Dienstleister

Temporary employment – (die) Zeitarbeit 

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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