In a significant development for Germany’s industrial sector, the country’s largest trade union, IG Metall, has reached an agreement with employers on a new wage deal for workers in the metal and electrical industries. The agreement, finalized on Tuesday, will see workers in some of Germany’s most influential companies, including Mercedes-Benz, BMW, Siemens, and Thyssenkrupp, receive a 5.5% wage increase over the next two years.
This new deal comes after tense negotiations and months of industrial action. The wage increase will be implemented in two stages. Initially, workers will see a 3.1% increase, followed by an additional 2% raise in the second phase, ensuring a total rise of 5.5%. The contract spans 25 months, offering a sense of stability to both workers and employers during a challenging economic period for Germany.
Additionally, 230,000 trainees in the sector will benefit from an increase of 140 euros per month. IG Metall, which represents over 3.9 million employees in the metal and engineering industries, emphasized the importance of providing workers with more flexibility and improved options to balance time and financial compensation.
The deal was closely monitored by the European Central Bank (ECB), as wage growth could potentially impact inflation rates in Europe’s largest economy. The negotiations, which lasted 18 hours, were seen as crucial for maintaining industrial peace and preventing further disruptions. In recent weeks, Germany has experienced widespread warning strikes, with hundreds of thousands of workers protesting to demand better wages and working conditions.
IG Metall’s initial demands called for a 7% wage increase over a 12-month period, alongside more flexible working hour arrangements. In contrast, employers had initially proposed a more modest increase of 3.6% spread over 27 months. The compromise reached represents a significant achievement for the union, as it strikes a balance between the needs of workers and the economic challenges currently facing Germany.
With the deal now settled, attention will likely turn to how the wage increases affect the broader economic landscape, particularly in terms of inflation and productivity within the manufacturing and engineering sectors.