The more than half a million employees in German chemical companies will receive more money in two stages. Employers and unions agreed on wage increases – but below the price increase. The inflation bonus should be fully exploited for this.
In the middle of the energy crisis, the union and employers agreed on a new wage package for the 580,000 employees in the chemical industry. According to the IG BCE, the tariff package provides for special payments totaling 3,000 euros per head, and table-based pay increases of 3.25 percent each will take effect in January 2023 and 2024. As the union announced, that makes a total of 6.5 percent. The term of the collective bargaining agreement is 20 months.
“This deal has a signal effect beyond the industry,” said IG-BCE boss Michael Vassiliadis. “After all, it proves that well-done collective bargaining policy can be a central component of a bulwark against inflation and energy wars for society as a whole.” It is also the highest tariff increase in the chemical industry for more than 30 years. “With this result, we keep the balance between the competitiveness of the companies and the interests of our employees,” said Kai Beckmann, President of the employers’ association BAVC.
For economic reasons, the companies could postpone the wage increases by up to three months by means of a company agreement, but this does not apply to the special payment, it said. With the “tariff inflation money”, the offer of the federal government to make payments from employers of up to 3,000 euros tax and duty-free to relieve people is being fully exploited, the union said.
In April, employers and unions had initially agreed on a seven-month bridging solution with a one-time payment of 1,400 euros due to the growing uncertainties resulting from the Ukraine war. Difficult companies had the opportunity to reduce the payment to 1000 euros. The IG BCE went into the third round of negotiations without a concrete demand, but had insisted on a sustainable table-effective increase in wages.
Originally, the union had sought a wage agreement above the rate of inflation. At the time of the demand, however, inflation was still significantly lower before it had climbed to new highs as a result of the Ukraine war. In September, inflation in Germany was 10.0 percent, the highest since 1951. The federal government forecasts an average inflation rate of eight percent this year and seven percent in 2023.
As the largest industrial energy consumer in Germany, the chemical industry has been massively affected by the exploding energy prices. Gas is not only the most important source of energy for companies, but is also required in large quantities to produce their products. They are finding it increasingly difficult to pass on increasing costs to customers through higher prices. The world’s largest chemical group, BASF, was in the red in Germany in the third quarter and last week announced a new austerity program that also includes job cuts.
The chemical industry with 1900 companies is Germany’s third largest branch of industry after the automotive industry and mechanical engineering. In the last collective bargaining round at the end of 2019, employers and IG BCE had agreed on salary increases totaling up to six percent.