How are German workers reacting to high inflation? Do they push them further up with strong wage demands? The most important test for this this year is the collective bargaining round for four million employees in the metal and electrical industry. And that’s just one of the issues the largest German trade union is currently dealing with.
inflation and wages
Consumer prices climbed by 3.1 percent in 2021, and the federal government is even expecting 3.3 percent this year. Despite wage increases, employees quickly have less money available in real terms, i.e. after inflation. Real wages shrank nationwide by 1.4 percent last year, researchers calculate. “The expectations of our members are clear,” says IG Metall boss Jörg Hofmann. “They want rising wages that arrive in the wallet.” Hofmann is ready to fight as usual: “If you want an upswing, you need stable real income. If you want to retain skilled workers, you can’t just look at the return.”
In order to increase wages in real terms, IG Metall would have to negotiate a wage agreement of more than 3.3 percent for 2022. And in order to get that through to employers, I’d probably ask for five or six percent first – sounds like an inflationary driver. If you listen to Hofmann longer, you will get a more differentiated picture. Traditionally, IG Metall does not base its demands solely on current inflation data. But on the European Central Bank’s target inflation of two percent – plus an increase in productivity and a share of what the companies earn. Immediately sounds like less wage demands. In addition, the new collective agreement only covers the period from October of this year. For him, the presumably lower inflation in 2023 will be the more important benchmark than consumer prices this year.
Hofmann calculates that the metal workers have no catching up to do due to the sharp wage increases for 2018 and 2019, despite the recent price increases. Accordingly, the Germans would not have to fear that the unions would drive up inflation. The chemical union, which is carrying out the second major bargaining round, is also moderate.
Climate restructuring of the economy
Before thinking about higher wages, some metalheads tend to ask themselves whether they will even keep their job. In 2021, in the second year of Corona, a good two percent of jobs in industry were lost. Hofmann complains about a “dark triad of downsizing, closing factories and relocating jobs”. In order for Germany to remain a strong industrial country, companies would have to invest heavily in the future – but so would the state. Specifically, he is calling for ten billion euros by 2030 in order to make the steel industry climate-friendly.
Decline in membership and works council elections
While many unions have steadily lost members over the past ten years, IG Metall has kept its numbers stable for a long time. In the past two years, the largest German trade union has lost a total of 93,000 members – it still has 2.17 million. Hofmann justified the decline with the corona pandemic. Short-time work, contact restrictions and home office made it more difficult for shop stewards to approach employees. His deputy Christiane Benner welcomed the announcement by the federal government that trade unionists would soon be able to gain digital access to companies. “We know of companies that hire their IT administrators to intercept union information.” Benner called on employers not to obstruct the works council elections that are due to begin in March. All employees should be able to cast their votes despite the pandemic. In view of the great upheavals, Benner called for legal improvements to co-determination. Employees would have to help shape the strategic direction of their companies, “otherwise we risk losing hundreds of thousands of jobs.”
Who will lead IG Metall in the future?
It was interesting what Jörg Hofmann said in just under an hour’s annual press conference not said. Not a word from him about the fact that the unions had only agreed the day before to succeed Reiner Hoffmann at the head of their umbrella organization, the German Trade Union Confederation (DGB). With Yasmin Fahimi it will be a woman for the first time. Not worth mentioning for Hofmann. Perhaps he wanted to remain silent about the fact that the search for a successor dragged on for months and neither DGB board member Anja Piel nor IG-BCE boss Michael Vassiliadis found a majority. Only when asked did Hofmann explain somewhat grumpily that he was not at the press conference of the DGB, “but okay, two sentences.”
Despite its right to propose, IG Metall was not able to present its own candidate. “That was because no colleague could be convinced.” Hofmann was certainly thinking of his deputy Benner, who did not warm to the DGB chair. But perhaps he just forgot that at the end of the search, in addition to the chemical unionist Fahimi, he probably positioned a man from his own ranks for the DGB successor: the head of fundamental issues, Thorben Albrecht. In trade union circles it is said that in addition to IG Metall, Verdi was also for Albrecht – but the other six DGB unions for Fahimi. Eventually, all the organizations rallied behind her.
Hofmann still has the next recruitment process ahead of him. He will stop in autumn 2023, several metal weights are flirting with the successor. On the one hand there is his deputy Benner, who rejected the DGB leadership on the grounds that her place was in IG Metall. On the other hand, influential regional princes are said to be ambitious, above all Baden-Württemberg’s district manager Roman Zitzelsberger. Is there a showdown between two contestants like in the 2000s? Hofmann expresses it positively: When it comes to the question of succession, there is “no shortage of skilled workers”.