German industrial workers to get pay raises in 2-year deal

Nov 18, 2022, 1:05 AM | Updated: 1:51 am
FILE -- An employee in protective clothing takes a sample from the furnace at the steel producer, S...

FILE -- An employee in protective clothing takes a sample from the furnace at the steel producer, Salzgitter AG, in Salzgitter, Germany, Thursday, March 22, 2018. Germany's biggest industrial union has agreed with employers on a pay deal that will see millions of workers get raises totaling 8.5% over two years as well as one-time payments meant to cushion the effect of sky-high inflation. (AP Photo/Markus Schreiber,file)

(AP Photo/Markus Schreiber,file)

BERLIN (AP) — Germany’s biggest industrial union agreed with employers Friday on a pay deal that will see millions of workers get raises totaling 8.5% over two years as well as one-time payments meant to cushion the effect of sky-high inflation.

The IG Metall union and employers reached a compromise in the southwestern state of Baden-Wuerttemberg, a key industrial region. In Germany, wage deals are typically hammered out in negotiations between employers’ organizations and unions that cover a whole sector, and an agreement reached in one region is generally applied nationwide.

IG Metall negotiates for workers in the auto and machinery industries among others, representing a total of more than 3.8 million workers.

The union initially demanded an 8% pay increase and a one-year deal. It first made the demand in early July; since then, Germany’s annual inflation rate has risen from 7.6% to 10.4%.

In their fifth round of talks, both sides agreed to raises of 5.2% next June and another 3.3% in May 2024. On top of that, workers will get one-time payments of 1,500 euros ($1,550) each at the beginning of 2023 and another 1,500 euros a year later.

German Chancellor OIaf Scholz, who has sought to find ways with unions and employers to address the impact of rising prices while preventing an inflationary spiral, has been keen to promote such tax-free payments of up to 3,000 euros.

“We have succeeded in an extremely challenging time in appreciably unburdening employees, sustainably stabilizing incomes and strengthening purchasing power,” IG Metall Chairman Joerg Hofmann said in a statement. He argued the agreement would strengthen the German economy, which is expected to shrink next year.

The chief negotiator for employers’ association Suedwestmetall, Harald Marquardt, said the outcome was acceptable but “certainly painful in many points and absolutely at the limit of what the majority of our members think is sustainable.” He said employers agreed partly because of the need to head off strikes in an already uncertain situation, and the deal offers calm for what are likely to be two difficult years.

Wage deals in Germany, Europe’s biggest economy, are being watched as inflation flares across the 19-nation euro area and the European Central Bank raises interest rates rapidly in an effort to tame it. ING economist Carsten Brzeski said Friday’s outcome “shows what a compromise can look like.”

“It won’t be enough to fully offset the drop in purchasing power caused by higher inflation, but it softens the damage,” Brzeski said in a research note. “For the ECB, it signals that second-round effects remain dampened and that a lower, subdued inflationary pressure can last for longer than markets currently think.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Indian Finance Minister Nirmala Sitharaman, in red, leaves her office for President's house before ...
Associated Press

India finance minister announces new clean energy funds

BENGALURU, India (AP) — Indian finance minister Nirmala Sitharaman announced several new clean energy initiatives in the government’s annual federal budget speech on Wednesday, saying “green growth” is a top priority for the country. More than $8 billion dollars were announced for projects like mangrove restoration which help suck carbon dioxide out of the atmosphere, […]
3 hours ago
A man on his tricycle carries transports vegetables at a wholesale market in Guwahati, India, Wedne...
Associated Press

India to raise spending on job creation ahead of election

NEW DELHI (AP) — Prime Minister Narendra Modi’s government presented to Parliament on Wednesday an annual budget of $550 billion that calls for ramping up capital spending by 33% to spur economic growth and create jobs ahead of a general election next year. Finance Minister Nirmala Sitharaman said private investment was rising after the pandemic […]
3 hours ago
FILE -- Beer bottles are filled at the Veltins beer brewery in Meschede, Germany, Wednesday, Aug. 2...
Associated Press

German beer sales up in 2022 after COVID pushed them down

BERLIN (AP) — German beer sales rose in 2022 after COVID-19 restrictions weighed on brewers in the previous two years, but the long-term trend remains downward and the World Cup soccer tournament in Qatar didn’t get the taps flowing, according to official figures released Wednesday. The Federal Statistical Office said that German-based breweries and distributors […]
3 hours ago
In this photo provided by the Department of Fire and Emergency Services, its members search for a r...
Associated Press

Radioactive capsule that fell off truck found in Australia

PERTH, Australia (AP) — Authorities in Western Australia on Wednesday recovered a tiny but dangerous radioactive capsule that fell off a truck while being transported along a 1,400-kilometer (870-mile) Outback highway last month in what an official said was like finding the needle in the haystack. Officials said the capsule the size of a pea […]
3 hours ago
FILE - Ozzy Osbourne arrives at the 62nd annual Grammy Awards at the Staples Center on Jan. 26, 202...
Associated Press

Ozzy Osbourne cancels 2023 European tour dates, cites injury

Hard rock legend Ozzy Osbourne announced the cancellation of his 2023 tour dates in the U.K. and continental Europe. Osbourne issued a statement early Wednesday saying damage to his spine suffered in an accident four years ago will prevent him from touring. “I am honestly humbled by the way you’ve all patiently held onto your […]
3 hours ago
Teachers hold flags and placards on a picketline outside Holland Park School as they go on strike o...
Associated Press

Day of disruption in UK as up to half a million join walkout

LONDON (AP) — Thousands of schools in the U.K. are closing some or all of their classrooms, train services will be paralyzed and delays are expected at airports Wednesday in what’s shaping up to be the biggest day of industrial action Britain has seen in more than a decade, as unions step up pressure on […]
3 hours ago

Sponsored Articles

(Desert Institute for Spine Care photo)...
DESERT INSTITUTE FOR SPINE CARE

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
...
Quantum Fiber

Stream 4K and more with powerful, high-speed fiber internet

Picking which streaming services to subscribe to are difficult choices, and there is no room for internet that cannot handle increased demands.
...
Quantum Fiber

How high-speed fiber internet can improve everyday life

Quantum Fiber supplies unlimited data with speeds up to 940 mbps, enough to share 4K videos with coworkers 20 times faster than a cable.
German industrial workers to get pay raises in 2-year deal