Catherwood LibraryILR School

Germany's largest labor union, IG Metall, is advocating for a 7% wage increase for approximately 3.9 million workers in the metal and electric parts industries. This move is aimed at compensating for significant consumer price increases experienced over the past years. The demand comes after a previous agreement in 2022 which saw wages increase by 8.5%. In contrast, the employer association Suedwestmetall has proposed no wage increase, leading to potentially tough negotiations scheduled to start in September. This situation is critical as the European Central Bank, which recently started reducing interest rates, monitors these negotiations amid concerns about ongoing inflationary pressures. The German economy continues to struggle with forecasts indicating a slow recovery and persistent high inflation rates. Meanwhile, labor costs are highlighted by employers as a key factor affecting economic competitiveness.