Ifo boss Clemens Fuest speaks out in the current collective bargaining round in the metal and electrical industry. The unions will hardly like his position.
The head of the Ifo Institute, Clemens Fuest, warns against high deals in the current collective bargaining round in the metal and electrical industry. “The German economy is currently weakening. The metal industry is no exception,” he said. “The current economic development does not allow for high wage increases that go well beyond compensating for inflation.”
Given the current inflation rate, the 7 percent demanded by IG Metall would mean a real wage increase of 5 percent, said Fuest. “Such a request would be understandable if the metal industry were booming unlike the rest of the economy. But that is not the case.” A high degree could harm the competitiveness of Germany as a location. This must be prevented.
Proponents of high collective agreements often argued that they would stimulate demand, said Fuest. “However, rising wages only increased demand if employees spent the additional money. This is not being observed at the moment, as in economically uncertain times people tend to put the extra money on the back burner.”
Source: Stern
