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German metalworkers' union demands eight percent pay rise

AFP
AFP - [email protected]
German metalworkers' union demands eight percent pay rise
Salzgitter AG employees who are also IG Metall union members taking part in strike action on June 1st, 2022. Photo: picture alliance/dpa | Moritz Frankenberg

Germany's biggest trade union, IG Metall, has called for pay increases of eight percent for millions of employees in the key engineering and metalworking sectors as households in Europe's biggest economy feel the pinch from soaring inflation.

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The collective bargaining of IG Metall - which negotiates for over 3.8 million workers in sectors ranging from auto to electrical and mechanical
engineering - sets the tone for the wage rounds of many other key industries in Germany.

"Employers must now do their part to relieve household incomes," said IG Metall chief Joerg Hofmann, as inflation in Germany hit highs not seen in decades.

German consumer prices rose by 7.6 percent on an annual basis in June, driven by rising energy costs in the wake of Russia's invasion of Ukraine.

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"Companies can pass rising costs on, not employees," Hofmann said, adding that the "vast majority" of businesses were in good shape and had full order books.

The union's demand for eight percent was the biggest for the sector since 2008, with negotiations to kick off in earnest from mid-September.

But the head of the Gesamtmetall employers' federation, Stefan Wolf, accused IG Metall of being "blind" to the problems faced by industry.

Companies had stood by workers despite the "coronavirus, component shortages and energy price shock" that have rattled industry over the past two years, Wolf said.

Central bankers are keeping a close eye on pay negotiations amid rising inflation out of concern that new wage increases could feed a self-sustaining spiral of inflation.

READ ALSO: How Germany wants to prevent a wage price spiral

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