Union eyes higher pay
FRANKFURT, April 9 (Reuters) – Germany’s biggest industrial union IG Metall said it would probably make a higher pay demand than last year when it enters wage talks this autumn for the 3.5 million workers in the engineering and metalworking sector.
“The expectations this time are extremely high,” IG Metall’s leader Berthold Huber told reporters in Frankfurt late on Tuesday in comments embargoed for Wednesday.
A sharp pay raise in what is Germany’s single biggest private sector deal would add to concerns at the European Central Bank, which has warned of the risks of wage hikes fanning inflation. Price growth is already running at a record high of 3.5 percent in the euro area.
Some two million German public sector workers last week won a raise worth just over 5 percent for this year, their biggest pay rise in 16 years. Other sectors have struck similar deals, bolstering expectations elsewhere.
Last year, IG union went into pay negotiations demanding a 6.5 percent raise for workers in the engineering sector, and secured one of the most generous deals in Germany.
When asked how the demand would look this year, Huber said:
“We’ll probably be higher.”
In May, IG Metall won the sector’s expanding workforce a 4.1 percent rise from June 2007, and a further 1.7 percent from June 2008, plus a series of one-off payments. Huber added that IG Metall would not orient its official demand on the recent public sector wage accord.
A spokeswoman for the union added later that the union’s demand will be based on expectations of its members as well an analysis in July and August of the economic outlook.
Traditionally, IG Metall’s official demand, which could be announced in August or September, is comprised of the sector’s productivity growth added to inflation with a so-called “redistribution component” packed on top.
The sector’s current wage contract, which affects companies like Siemens