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IG Metall demands eight percent pay increase
Photo: DPA

IG Metall demands eight percent pay increase

Published on: 23 Sep 2008 11:05 CET

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The level of increases, the highest sought by the union in 16 years, suggests that stormy wage negotiations with employers can be expected when the talks kick off next month.

“Profits have exploded in the metals industries, Germany has been world export champion for years, the sales margins are the highest they’ve been since the 60s and never before has so little been spent on wages and salaries measured as part of turnover,” said IG Metall boss Berthold Huber. “Now it’s our turn.”

Sectors that may be affected include automobile, semi-conductor and household appliance manufacturing. Agreements reached in the metallurgy sector often set the tone for other German wage talks.

Coming as the country's economy slows, IG Metall's wage demand points to bruising talks with employers that are likely to set the tone for other pay settlements across Europe's largest, export driven economy.

Current pay accords in the auto, IT and household goods industries expire on October 31 so the outcome will be closely watched by all sides, including car makers such as BMW and Volkswagen, and industrial giants like Siemens.

The European Central Bank too will be concerned, anxious that salaries should not rise too fast and stoke inflation which has just begun to come off record highs, slipping to 3.8 percent in August from 4.0 percent in July.

"High wage demands in Germany will not make monetary policy easier for the ECB" since they lessen the chances of reducing interest rates to support ailing economies, said Commerzbank analyst Eckart Tuchtfeld.

AFP/DDP/The Local(news@thelocal.de)