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Germany: the collective agreements signed in 2008 confirm the end of wage restraint

publié le 2008-07-01

In its middle evaluation, the Institute for Economic and Social Research (WSI) of the Hans Böckler Foundation presents a summary of the industry-wide collective agreements signed in the first six months of 2008. The wages negotiated increase of 4.6% in average. This is the strongest increase since 2000.

The WSI experts, who presented, on Wednesday, June 25, the middle evaluation of the collective agreements signed in 2008, say that the figures collected for the first months of the year show the end of wage restraint, which has been in use in Germany since the 1990s. "This is the biggest wage increase of the decade," said Reinhard Bispinck, who manages the WSI archives on collective agreements. The average negotiated raise is 4.6%, the highest since the beginning of the century. For 2008, the WSI plans a 3.3% increase, as opposed to 2.2% in 2007. Based on an average annual 3% inflation rate, Mr. Bispinck nonetheless specified that the actual wage increase will remain "quite moderate." "However, it is still the first time there is an actual growth in three years" he concluded. The Institute for the German Economy (IW), in Cologne, in close relation with employers, feels that this increase is tolerable because it is differentiated: "The highest agreements are in the sectors which enjoy a boom in sales abroad, and which can therefore afford it" said Hagen Lesch, specialized in the IW’s collective agreements. The chemistry, metallurgy and federal and municipal services sectors are the leaders with an average 5% increase. For the moment, the ugly duckling is the food industry, with a 2.5% increase only. The agreements signed since the beginning of the year concern 4.4 million employees, i.e. a little less than one fourth of employees covered by industry-wide agreements. In addition, the wage increases of 4.6 million employees have already been negotiated in 2007. Finally, only 30% of the agreements increase paid leave bonuses (Urlaubsgeld, or holiday bonus), with increases of 3-4.1%. German employees get, in average, 30 days of vacation and, depending on their branch, holiday bonuses between €155 and €1944.

Planet Labor, July 1, 2008, No. 080547 – www.planetlabor.com

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