The high inflation worries many Germans. And that applies in particular to the sharp rise in energy prices. The chemical and energy union (IG BCE) is now demanding state aid for the population – and wants to prevent employees from suffering financial losses in the coming collective bargaining round.
Union boss Michael Vassiliadis believes that the 15-20 year era of low price increases is coming to an end. “We have to adjust to inflation being a longer-term phenomenon again,” Vassiliadis said on Monday. That makes one sit up and take notice, because some economists fear that the trade unions could push up inflation even more by demanding high wages. And the third-largest trade union is due for the new wage round in the spring – the first real test of how employee representatives will react to the sharp rise in prices.
Vassiliadis explained that for the more than half a million employees in the industry there should be no permanent losses in real wages – i.e. wages minus price increases: “Classic wage demands must now have priority”. Tariff expert Ralf Sikorski explained: “The goal is to balance the inflation rate and to achieve a real wage gain”.
Is there a wage-price spiral?
If you take the price increase of 3.1 percent in 2021 as a benchmark, IG BCE would then have to achieve a wage increase of well over three percent. Sikorski explained, however, that one wanted to orientate oneself to the point in time at the end of March, when the negotiations begin: the current inflation and the forecasts for the rest of the year are decisive.
Is there a wage-price spiral? In the 1970s, unions had fueled inflation with wage agreements, some of which were in the double digits. Vassiliadis tries to dispel such concerns: the share of wages in sales is only 14 percent in the chemical and energy industries. And in industry as a whole at a good 16 percent. “It’s not an order of magnitude that’s driving prices. I don’t see any danger of wage-price spirals.”
He called on the federal government to act in view of the high energy prices. The strong price increases threatened to overburden many households and companies. Among other things, he called for energy checks with a flat-rate subsidy for households. In addition, there should be a higher mobility premium for low-income earners when commuting and earlier relief for the EEG surcharge. “There is poverty in Germany, and it is being exacerbated by current energy developments.”
Vassiliadis also commented on the successor to Reiner Hoffmann, who will soon be retiring due to age. He admitted that it had not yet been possible to agree on the personnel at the head of the umbrella organization of the trade unions. So the plan to establish a woman as DGB boss for the first time failed. Vassiliadis confirmed that he then agreed “out of responsibility” to take on the post himself. However, there was not the support of all individual organizations, which is said to be due to the Verdi service union, which is politically more left-wing than the moderate Vassiliadis. “Now we have to agree on someone,” said Vassiliadis, “there isn’t much time left”.