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Wednesday, March 22, 2023

Income: Tariff salaries hardly increased in 2022

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In collective bargaining, the signals are pointing to strikes in many places. Verdi and EVG want to push through high deals in view of the strong inflation. One-off payments are no longer so popular.

Now the employees also have it officially: In the past year, collectively agreed wages rose much more slowly than consumer prices.

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According to the Federal Statistical Office, the payroll employees had only 2.2 percent more money in their pockets last year. Because consumer prices rose by 6.9 percent during this period, the real wages of all employees fell significantly for the third year in a row.

In the ongoing collective bargaining negotiations, the numbers are likely to heat up the mood among employees, because people in the lower wage brackets feel the pressure of more expensive energy and food particularly strongly. 15 percent more at the post office, a monthly increase of 650 euros at Deutsche Bahn, which would mean 25 percent more in the lower wage brackets: the demands of the unions have reached unprecedented heights this spring, the employees are determined to take industrial action. The labor shortage provides additional arguments.

“One-off payments are a sweet poison”

The collective bargaining agreements in the strong metal and chemical industry sectors, which will largely only take effect this year, have not yet been included in the 2022 calculations. In addition to table increases, they contain so-called inflation compensation premiums of 3000 euros, which have been made tax and duty-free by the federal government. Although the trade unions agreed to this instrument in the negotiations for the concerted action, they are increasingly critical of the bonuses. So says Verdi boss Frank Werneke: “A one-time payment is not sustainable. The prices remain high even when the bonuses have long since stopped working.”

“One-time payments are a sweet poison,” agrees union economist Reinhard Bispinck. He is convinced that the volume of one-off payments in the negotiations must be bought with lower table increases. Bispinck did the calculations as a model: In the second year, those employees who have won permanently higher salaries instead of the tempting one-off payment already have financial advantages. This applies gross as well as net.

According to observations by the trade union WSI collective bargaining archive in the Böckler Foundation, many employers, for example in retail and the financial sector, have already voluntarily made high one-off payments to employees. WSI manager Thorsten Schulten describes: “Employers are simply trying to unilaterally offer one-off payments instead of increasing the table. Of course, with the caveat that the amount should be included in subsequent collective bargaining talks.”

Collective wages will rise significantly more in 2023 than in 2022

Overall, the flash in the pan effect is definitely desirable. The tariff expert Hagen Lesch from the employer-related Institute of German Economics (IW) relies entirely on the one-off payments. He warns that wages and consumer prices will fuel each other if the trade unions prevail with their high demands. The economist writes: “It is to be hoped that the (…) tax-free one-off payments will be used by the social partners and that the actors will work together to counteract a wage-price spiral.”

So far, the only thing that seems certain is that collectively agreed salaries will rise much more sharply in the current year than in 2022, says WSI director Schulten. It is not yet possible to put a precise figure on this. “It is also not certain whether inflation can be compensated for after three years of real wage losses.”

In any case, the Bundesbank believes that inflation is not expected to fall off quickly. In her most recent monthly report, she already refers to so-called second-round effects from the current wage agreements – when companies increase their prices in order to be able to pay the higher salaries. “They help ensure that the inflation rate will remain well above the medium-term target of 2 percent for the euro area over a longer period of time.”

Source: Stern

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