IG Metall trade union leadership said it was recommending its 3.9 million workers demand a significant wage increase because of persistently high price levels.
 "Germany's largest industrial union calls for 7% wage increase for millions of workers")
Germany's annual inflation rate fell to 2.4% in May, down from around 9% at the start of last year. Image: ShutterstockAP Berlin
Germany's largest industrial union said on Monday it would seek a 7 percent pay rise for millions of workers in negotiations that start later this year, arguing that companies including car and machinery makers can afford to pay it.
IG Metall union leaders said they were recommending a big pay rise for its 3.9 million workers because price levels remain high. The union said companies had ample order backlogs and prices were no longer rising as sharply as before, but that a lump sum agreed in a previous settlement had been wiped out by inflation.
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In the last wage negotiations, IG Metall and the employers agreed to a combined 8.5% pay increase over two years, plus a lump sum payment of €3,000 (approximately US$3,200) to cushion the impact of soaring inflation in the second half of 2022. The government, eager to combat the effects of rising prices while preventing an inflationary spiral, actively promoted these tax-free payments.
IG Metall has now asked for a 7% pay increase and a one-year contract, saying it understands the uncertainty at some companies but that this should not undermine the strength of the industry overall or the improving economic outlook.
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In Germany, wage agreements are typically negotiated between industry-wide employers' associations and unions, and what is agreed in a region generally applies nationwide. IG Metall's current agreement expires at the end of September.
Germany's annual inflation rate fell to 2.4% in May from around 9% at the start of last year.
Europe's largest economy is struggling to grow, and employers say the economic situation does not allow for big wage increases.
