Germany’s IG Metall union, the largest industrial union in the country, announced Monday that it wants an 8 percent pay increase for its members to help deal with the rising prices as the inflation rate came in at 7.6 percent in June.
Joerg Hofmann, the head of the union, told The Associated Press that the German economy needs higher incomes to offset inflationary pressures.
He said companies are able to pass rising costs, but employees do not have that luxury. About 3.8 million workers in the metal and electric industry would stand to benefit from the pay increase.
Thorsten Groeger, the IG Metall negotiator, told Automotive News Europe that inflation is destroying wealth, “hitting incomes, and putting many households in economic difficulties.”
The recommendation is the highest in about 13 years. The negotiations will start in September. The European Central Bank has warned that high pay increases could increase inflationary pressure on economies. (See “TOP 2022 UNIONIZATION TREND UPDATE,”)
WSWS.org reported that steel prices have soared on the world market and the profits of these companies have “exploded” since many COVID-19 restrictions were lifted. These companies are in line to make even more profit as the Ukraine War drags on.
The website said “champagne corks” must be popping in steel company boardrooms after Germany announced its €100 billion euros investment in its military revamp.
These workers are producing steel for tanks, submarines, and warships, the report said.
Greg Fuzesi, a JPMorgan economist, called the request “not a particularly strong pay increase, especially when considering the surge in inflation and the strong orders position of the German industrial sector.”
TREND FORECAST: Unionization will continue to be a Top Trend and, as inflation continues to rise faster than wages, corporations that wish to incentivize their workforce to do and give the best they can, will raise the pay scale to levels higher than inflation rates. In doing so, they will create atmospheres of mutual appreciation.