Dhe executive board of IG Metall seals this Monday what its collective bargaining commissions recently decided: a wage demand of 8 percent for the 3.8 million employees in the metal and electrical industry. Since it is about wage negotiations in the largest wage area of the German economy, the union sets an important point of reference for the entire wage policy in inflationary times. And it can be said that while the Chancellor’s “concerted action”, which was accompanied by enormous attention, is still laboring over the question of what its goal could actually be, IG Metall is moving ahead.
That’s not indecent. It is their right to terminate the collective wage agreements with the employers’ associations at the end of the commitment period in September and to demand renegotiations; also on the grounds that the cost of living for its members has risen enormously. This is how collective bargaining policy works – no matter what the government, its advisors and companions or the employers want now. However, IG Metall is embarking on a risky journey in terms of collective bargaining policy.
The 8 percent are even at the upper edge of what their board of directors had specified with its recommendation corridor of 7 to 8 percent for the intra-union debate. And they are astonishingly close to the 8.2 percent that IG Metall demanded in spring for the small area of the steel industry – at the time with the qualifying explanation that there was a special boom there. The prospects for the rest of industry have been anything but improved since then.
Word of fear “wage-price spiral”
But under the impression of persistent inflation, the expected heating cost shock and the (to put it mildly) random political debate about the “concerted action”, the pressure of expectations among IG Metall members has continued to grow. Without the limiting influence of the Management Board’s recommendation, the demand would probably have been even higher.
Stranger than the behavior of IG Metall, however, is how the impression could arise on the political stage that a dialogue group made up of employers, unions and the chancellor decides on the course of collective bargaining rounds. An inflationary use of the fear word “wage-price spiral” contributed to this, reinforced by destructive handling of the idea that politicians should make collectively agreed one-off payments to employees tax-free. As a thank you, the unions would then promise lower wage demands – so the erroneous expectation.
It is all the more absurd as there is not even a consensus as to where the boundary between “low” and “high” wage demands is. The government itself is currently increasing the statutory minimum wage by 25 percent compared to the previous year and shows no concern that this could increase inflation or overwhelm affected companies. In contrast, the 8 percent of IG Metall seem downright modest.
Cushion existential burdens
But for industrial companies, whose energy and raw material costs are multiplying, the situation is different. It is true that it is currently difficult to convey a wage policy to employees that is strictly limited to meager productivity gains; Especially not with the abstract justification that every step threatens to incite companies to raise prices again. Companies, however, cannot be given a wage policy that follows the purchasing power requirements of their employees without regard to business prospects.
The trade-off is complicated. But it doesn’t get any easier if the responsibility for it gradually shifts from the social partners to the government. The most effective limiter of excessive expectations on the trade union side has always been the perception of economic risks by the employees in their company. Because it limits their willingness to go on strike, which in turn increases the trade union leadership’s ability to compromise. Unfortunately, politicians have long since distorted these mechanisms in an invisible way: For years, they have been promoting the expectation that the state will not only step in to help in emergencies such as an energy crisis, but also – with short-time work benefits and subsidies – in almost every threat to jobs. Instead of radioing into the collective bargaining rounds via “concerted actions”, the government would do well to concentrate on core tasks of the welfare state.
For private households, it is about cushioning the existential burdens of energy price hikes, strictly according to objective need, not industry or union affiliation. That is politically and fiscally demanding enough. And if the government is still keen to show collective bargaining competence – the upcoming big pay round in the public sector is suitable for this.