So now the number is there: seven percent. That is how much more money IG Metall is demanding for the almost four million employees in the metal and electrical industries. The union also wants to implement more flexible working time models. Officially, the package of demands is still a recommendation from the IG Metall board, the union’s bodies still have to decide on it in the coming weeks – but that is just a formality.
The message that will come from the largest collective bargaining round in Germany this year is clear: the times of high inflation like in 2022 and 2023 may be a thing of the past. But the disputes over higher wages between unions and employers will remain confrontational, including the risk of strikes. Südwestmetall, the association of influential employers in Baden-Württemberg, has already announced resolute resistance if IG Metall demands a significant wage increase. That is exactly what the union is now doing.
IG Metall argues that the hardships of high inflation – in 2022 and 2023, inflation totaled almost 13 percent – are by no means over for employees. “They are feeling the wave of inflation everywhere,” union leader Christiane Benner recently told the SZ. For example, “in the supermarket, where they get 20 percent smaller packages for the same money, with the increased rents.” Some are also getting “huge bills for last year’s energy costs,” said Benner.
IG Metall had negotiated salary increases of 8.5 percent at the end of 2022. In addition, there was an inflation compensation bonus of 3,000 euros. Since the bonus was only paid once, the bottom line is that there is a gap in the wallet compared to inflation, argues the union.
Employers complain about “high labor costs”
Last week, however, employers in the car-producing state of Baden-Württemberg called for wages not to be raised at all this time. “Even if this causes an outcry, the correct number in terms of wage development would be zero,” said Harald Marquardt, negotiator in Baden-Württemberg. The union feels provoked by this. “This is a slap in the face of employees,” explained IG Metall boss Benner.
Not everyone in the employers’ camp is enthusiastic about Marquardt’s initiative either, because he has hardened the fronts in the wage negotiations right from the start. However, most companies share the view that the economic situation is bad. In April, they published a statement together with IG Metall, according to which Germany as an industrial location is in danger, says Gesamtmetall President Stefan Wolf. In other countries, more investment is being made due to more competitive conditions.
“Even if we look at the situation and the performance of our employees, the situation remains extremely critical,” explains Wolf, demanding consequences in the upcoming collective bargaining round. “Labor costs are a factor that determines the competitiveness of our location, and they are the factor that we, the collective bargaining parties, have influence over.”
Harald Marquardt from Baden-Württemberg refers to a survey of the association’s companies, according to which 91 percent see “high labor costs” as a particularly burden on their business. In their view, the wage issue is therefore even more pressing than the tax burden, energy prices and bureaucracy. “We have a cost issue that we cannot close our eyes to,” says Marquardt.
Things will get really serious in September
According to his analysis, the last wage increase in the metal industry in 2022 of 8.5 percent plus an inflation premium largely offsets the price increases. In addition, inflation is falling. If IG Metall justifies wage increases with losses for employees, it has no arguments.
Almost 40 percent of companies expected a return on sales of less than two percent. A high wage agreement could lead to companies producing more abroad than in Germany. Of the companies that increasingly invested abroad, almost 90 percent cited labor costs as the reason for this.
Things will get really serious in September, when employers and IG Metall meet for the first collective bargaining negotiations. These will take place at a regional level in the individual union districts, for example in Bavaria, Baden-Württemberg and North Rhine-Westphalia. Traditionally, a pilot agreement is negotiated in one of the influential districts, which is then transferred to the rest of Germany. In the past, Baden-Württemberg and North Rhine-Westphalia in particular have taken on this leading role. That is why the statements of the union and employer leaders there carry particular weight. But it is also not impossible that one of the younger, ambitious officials from another union district will want to negotiate the pilot agreement this year.
The obligation to maintain peace ends on October 28. After that, warning strikes are permitted. IG Metall has already made it clear that industrial action is an option for them this time too. “If necessary, we will strike intensively,” union leader Benner told the SZ last week. They are “naturally prepared for anything.” Not just for shorter warning strikes, but also for a longer industrial action including a ballot vote, which could lead to an indefinite strike.