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 salaries of trainees are to be increased by 170 euros a month; 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 committees 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.
IG Metall wants to further develop the existing models in terms of more flexible working hours. So far, shift workers who look after children or those in need of care have been able to convert a special payment, known as T-Zug, into up to eight additional days off. In the future, other shift workers should also be able to take advantage of this model – for example if they want to do voluntary work. In this way, IG Metall wants to strengthen social commitment – also in light of the growth of right-wing parties in the European elections.
Employers complain about “high labor costs” and want “zero”
The package of demands is likely to upset employers. Last week, the car-producing state of Baden-Württemberg called for wages not to be increased 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 hardened the fronts in the wage negotiations right from the start. However, most companies share the view that the economic situation is bad. “The metal and electrical industry is still in recession,” said Gesamtmetall President Stefan Wolf on Monday. “But the union’s ideas sound as if we are in an economic boom.” However, they agree with IG Metall that far too many location and investment decisions are currently being made against Germany as a location. “With all due respect for the concerns of our employees, it is now more important than ever to strengthen the location. I hope that the IG Metall committees will use the further consultations to come to a more realistic assessment of the situation.”
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.