Thursday, July 25, 2024
31 C
Brunei Town

German steelworkers agree 6.5pc pay leap after strike

FRANKFURT (AFP) – Tens of thousands of steel workers in western Germany will get a 6.5-per-cent pay hike this year – the biggest jump in three decades – in a settlement that could set the tone for industry as inflation soars.

The agreed increase would come into effect “from August 1”, the IG Metall union in the region of North Rhine-Westphalia said in a statement yesterday.

The 68,000 steelworkers in the industrial region would also receive a one-off payment of EUR500 for the months of June and July, the union said.

Germany’s largest union, IG Metall launched a strike action at steelworks in the west in May after management failed to meet its demands for an 8.2 per cent pay increase. “Rising inflation” and the “good economic situation” of the steel industry were the basis for IG Metall’s demands.

Consumer prices rose at a 7.9-per-cent rate in Germany in May, a record for the country since reunification in 1990 driven by the outbreak of the war in Ukraine.

The smaller number of steelworkers in the east of Germany, who are also seeking an 8.2 per cent pay boost, have yet to reach their own agreement.

Negotiations are currently taking place in a number of sectors. In the textile industry, 12,000 workers in the east of Germany sealed a 5.6-per-cent pay increase at the beginning of May.

Meanwhile, negotiations covering the auto industry, and mechanical and electrical engineering will begin in November.

Despite the agreed rise the onus was still on government to relieve the pressure on workers form rising prices “in the coming months”, IG Metall boss Joerg Hofmann said.

Significant wage demands have prompted concerns of a wage-price spiral, where rising pay sustains higher inflation.