German unions win substantial pay rises

In most areas of the German economy, recent union-negotiated pay increases have seen an appreciable rise in earnings in real terms.

This is one of the main conclusions of an analysis of pay negotiations in the first six months of 2015 produced by the WSI research body close to the DGB, the main German union confederation.

The figures show an average 2.9% annual increase in collectively negotiated wages across the whole economy. With inflation currently at 0.3% (June) and expected to be between 0.5% and 0.8% over the year, this means that “negotiated rates will go up by a good 2% this year”, according to the WSI’s pay expert Reinhard Bispinck.

Among the major settlements recorded in the first half of the year were the agreements for 3.5 million metalworkers, where the union IG Metall got 3.4%; for 550,000 chemical workers, where IGBCE settled at 2.8%; for 822,000 workers in regional government, where Ver.di negotiated a 2.1% increase; and for around 160,000 employees of the German railway company Deutsche Bahn, where two unions, EVG and GdL, both obtained a 3.5% increase for the employees they represent.

As Bispinck points out, this is also good for the economy. He said that “the change in earnings for those covered by collective bargaining continues to be positive … and so make an important contribution to domestic demand.”