Germany employers and unions agree pay increases of 25%

Image copyright Reuters Image caption Their pay rises come ahead of nationwide strikes that are expected to start on 12 April

Companies in Germany will boost pay by about 25% for almost two million workers by 2018’s end.

Employers and unions agreed a deal after nearly a year of talks.

The agreement will be applied to the 6.9 million employees covered by the nationwide “GdP” (Greens/Left/Communist) minimum wage, which kicks in on 1 April.

Details of the increase have not been released but unions say it is in the mid-20% range.

Photo credit: WDR

Roughly 4.5 million workers will not be affected by the deal.

Income at the bottom of the wage ladder will rise more slowly than those above it, the union IG Metall said.

Unions and employers had been trying to reach a deal to set a “solid basis” for 2018 wage negotiations in Germany, said Manfred Weber, the leader of the largest conservative grouping in the European Parliament.

Prospects of a strong agreement looked grim early in the negotiations, given that Germany’s Social Democrats – which has traditionally backed left-wing unions – had said last week that it would vote against wage hikes of more than six percent.

The negotiations were just getting started when the strikes would normally start, as trade unions planned a series of strikes for around 10 April to apply pressure on the employers.

Employers sought to have the pay increase spread over two years instead of one, saying it would make the increase less attractive to employers.

But the unions demanded a one-off, 25% pay rise to cope with rising costs and to stem the tide of people moving abroad for work.

Employers had initially offered a two-year pay deal and a one-off 6% pay rise.

Germany’s past history of labour unrest has created a cyclical tendency for large-scale strikes.

During the economic downturn of the 1990s, around 80,000 workers walked off the job per week for three weeks.

Employers were widely blamed for the instability caused by the strikes, as part of a 1998 deal that gave workers a minimum wage of €8.75 (£7.10) per hour.

The Basic Wage was then raised annually.

Not all unions are happy with the agreed settlement.

The Verdi union, which represents about 3.6 million workers, says some employees have been left with “less money” as a result of the deal.

It has vowed to vote against the agreement at a Frankfurt congress on 15 April.

Image copyright Reuters Image caption Germany’s wage settlements tend to be severe

The deal took nearly a year to negotiate. The initial deadline for a deal was 24 March, but employers and unions extended the talks by five days.

Negotiations were again extended into the night on Tuesday in the presence of a mediator, with the settlement announced at about 04:00 local time on Wednesday in a news conference.

Roughly 20,000 workers walked off the job in Berlin, Frankfurt, Dusseldorf and several other German cities in protest at the deal.

Some 3,000 have been out for a week already.

Next week’s strikes in Hamburg are the next-biggest, with some 17,000 employees set to walk out over the next five days.

In Dusseldorf, some 2,500 workers walked out on Wednesday morning, the Rheinische Post reported.

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