August 29, 2010 / 10:43 AM / 9 years ago

German unions want higher wages in economic upturn

BERLIN, Aug 29 (Reuters) - German unions will not settle for modest pay rises again this year after accepting moderate wage deals in recent years due to the economic crisis, the head of the country’s trade union federation (DGB) said on Sunday.

Michael Sommer, chairman of the 6 million-strong trade union umbrella group, was quoted in the Hamburger Abendblatt newspaper saying the country’s economic upturn this year was justification for stronger pay increases.

“We’re not going to hold back in this upturn,” Sommer said. “Now it’s our turn.”

German workers largely held back on demands for pay rises over the past year in an effort to protect jobs during the recession. But that is changing now the economy is recovering.

Germany’s economic strength has been reflected in the performance of its leading businesses. Of the 30 companies in the blue-chip DAX index, 23 beat market expectations with their earnings in the quarter to end-June and 12 hiked their outlooks.

On Friday IG Metall demanded a 6 percent pay raise for 85,000 steelworkers. The steel employers rejected the demand.

The steelworkers’ existing wage agreement expires at the end of this month and negotiations on a new deal start on Sept. 6.

IG Metall demanded 4.5 percent last year, then settled for an increase of 2.0 percent plus a one-off payment of 350 euros.

The German economy grew 2.2 percent in the second quarter, its fastest quarter-to-quarter rate in 20 years.

But the president of the Gesamtmetall employers association, Martin Kannegiesser, called the pay demand over the top.

“After the deepest and most brutal recession in recent history, the upturn still has wobbly legs,” Kannegiesser wrote in a column for Bild am Sonntag. “Our companies went through a financial bloodletting.” <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a factbox on wage deals and disputes in 2010, click on [ID:nnLDE67A1TD] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Engineering sector unions agreed a two-year pay deal in February comprising a one-off payment of 320 euros followed by a fixed 2.7 percent wage rise from April 2011 for some 3.5 million) employees [ID:nLDE61H0RL]

Reporting by Erik Kirschbaum; editing by David Cowell

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