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IG Metall calls for wage hike for employees
Photo: DPA

IG Metall calls for wage hike for employees

Published on: 08 Sep 2008 17:59 CET

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IG Metall chief Berthold Huber said in a statement that the demand was justified by the strength of firms in those key sectors, a rise in the cost of living and the need to give workers a fair share of profits.

The union's local chapters will debate the leadership's recommendation and announce its final pay demand later this month. Wage talks will start in October.

The salary accord for employees at giants of the German economy such as BMW, Siemens and Infineon tends to set the tone for wage talks in other sectors.

But the German economy - the eurozone's largest - appears headed for a downturn after two strong years judging by the negative growth posted in the second quarter.

Employers will fight for a more modest wage deal due to the gloomy outlook. "We are confronted with a economic slowdown and are suffering from a steep hike in costs for raw materials and energy," the president of the metalworking employers' association Gesamtmetall, Martin Kannegiesser, said in a newspaper interview on Monday.

He called for IG Metall to show "restraint" in its wage demands. The wage accord still in place was struck in May 2007. After calling for 6.5 percent, IG Metall finally settled on a 6.5-percent hike and after a major wave of strikes was settled on a 5.8-percent increase over 19 months.

After several years of moderate pay rises in an anemic economy, the German trade unions have agitated for a dramatic improvement in pay.

The result has been a 5.2-percent wage increase in the steel industry, a 4.4-percent hike in the chemicals sector and a 5.1-percent pay rise this year and 2.8 percent next year in the public sector.

But the accords came before the German economy began to stumble. The European Central Bank has repeatedly warned against steep wage increases that could fuel inflation.