IG Metall Presses for 7% Pay Hike Amid Inflation Concerns

Germany's largest industrial union, IG Metall, seeks a 7% wage increase for millions of workers in negotiations later this year, citing high price levels and strong company order books. The union emphasizes that the current economic outlook and past inflation justify the raise despite some volatility in individual companies.

Germany's largest industrial union, IG Metall, announced on Monday its intention to pursue a 7% pay increase for millions of workers in the upcoming negotiations, citing robust order books and persistent high prices. Automakers and machinery manufacturers are among the companies the union believes are well-positioned to afford such increases.

The union's leadership has proposed a significant salary boost for 3.9 million employees, highlighting that, although inflation has moderated, previous one-time payments have been negated by ongoing cost pressures. In the prior round of talks in late 2022, IG Metall and employers agreed to an 8.5% raise over two years plus one-time payments of 3,000 euros each.

Amidst the current economic landscape, IG Metall argues for a one-year deal, acknowledging some firms' volatility but maintaining that the overall industry remains solid. Wage agreements in Germany are typically sector-wide and regionally negotiated but commonly applied nationwide. The current agreement expires at the end of September, with Germany's inflation rate easing to 2.4% in May from nearly 9% early last year.

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