Strikes lead to German settlement

German metalworkers reached a pay deal well above inflation last month, but only after the first full-scale strike in the industry since 1995.

The settlement provides for a 4.0% increase this year and 3.1% next year, at a time when inflation in Germany is running at 1.6% (April). However, part of the increase is for the introduction of new harmonised pay scales between manual and non-manual workers. Despite this, says Klaus Zwickel, president of the union IG Metall, the deal will put "more money in real terms in the pockets of every employee".

For the union this was very necessary, as even the employers have accepted that the previous two-year deal which fell below inflation had led to a "generalised level of dissatisfaction among employees". This meant that it was not difficult for the union to achieve a high level of backing for strike action, which was run on a regional basis for just over a week with a range of plants being hit for a shift at a time.

The metalworking settlement and a similar deal in the chemical industry, worth 3.6% over 13 months, are likely to set the pattern for this year's wage round. They will be the background to the general election in September, where the government faces a strong challenge from the right. (For full details of the two settlements see the Labour Research Department's Bargaining Report May 2002)