According to a Reuters report, Germany's largest industrial union, IG Metall, announced in a statement on June 21 that it would demand a 7% pay raise for Volkswagen over the next 12 months during wage negotiations scheduled for October this year.
IG Metall added that the negotiations will revolve around a collective agreement covering approximately 120,000 employees at six plants in Lower Saxony and Saxony-Anhalt, including Volkswagen's headquarters in Wolfsburg.
Earlier this week, IG Metall also suggested that its members demand a 7% pay raise in collective bargaining in the mechanical engineering industry (excluding Volkswagen). This wage increase would be significantly higher than Germany's latest annual inflation rate of 2.8% in May.
IG Metall stated that its proposed wage increase is based on the current "continuously rising price levels" and the "economic situation of the industry." In the last wage negotiations in 2022, workers in the industry already secured an 8.5% raise over two years, along with a one-time bonus of 3,000 euros.
However, due to the energy crisis triggered by the Russia-Ukraine conflict and the widespread economic recession faced by Germany, the largest economy in the EU, this proposal may be met with resistance from some industry leaders. Many employer associations have hinted that freezing or reducing wages (including those of many workers in Germany's vast automotive industry) might be a more reasonable option under the current economic conditions.
Recent data from Eurostat shows that labor costs in the eurozone accelerated at the beginning of this year, with the annual growth rate rising from 3.4% in the previous quarter to 5.1%. This growth trend is particularly pronounced in Germany, the main economy in the eurozone, where collectively agreed wages increased by 6.2% in the first quarter, marking the fastest growth rate in nearly a decade.
