German metalworkers’ union demands 7% higher wages ahead of bargaining round

By Thomson Reuters Jun 17, 2024 | 5:54 AM

FRANKFURT (Reuters) – The leadership of German metalworkers’ union IG Metall on Monday advised its members to demand 7% higher wages in the upcoming collective bargaining round, well above the current inflation rate.

IG Metall, Germany’s largest industrial union, said in a statement that regional panels will decide on the union’s official wage demands on Friday.

IG Metall said the bargaining round on behalf of 3.9 million workers would need to result in significantly higher pay because companies had a strong order backlog.

The union added that inflation may have eased, but that more wage increases are necessary for workers to cope with a high price level.

The European Central Bank said this month it would closely watch wages, after cutting interest rates for the first time since 2019, encouraged by a drop in inflation from 10% in 2022 to just over its 2% target recently.

Further rate cuts are in doubt, however, as ECB policymakers flagged strong price pressures and wage growth, likely keeping inflation above its target well into next year.

German consumer price inflation was 2.8% in May, up from 2.4% in April.

(Reporting by Christina Amann and Ludwig Burger, Editing by Friederike Heine)