Chemical Industry Flourishes Offering Wage Increase
In 2015, Germany’s chemical industry grew faster than it had in the previous four years, yet the employers’ group BAVC has rejected trade-union demands for a pay rise as a result. The IG BCE union point out that a wage increase when the sector is performing well will help to secure industry growth and support the country’s economy – all important at this time of continued Eurozone crises.
Klaus-Peter Stiller, BAVC’s Managing Director, countered this by arguing that the economics of the German chemical industry make sudden wage increases such as this impossible. Germany’s biggest union, IG Mettall, responded to this with a demand for a 5% pay increase, pointing out that they felt that it was only fair that employees should benefit from the increase in wealth of the companies they work for.
The trade unions have also pointed out that paying their members higher wages will help increase domestic purchasing demand, supporting the German economy at a time when export demand for German products, formerly a reliable source of income, is flagging in the face of the continuing world economic crisis.
Talks to agree pay rates at some of Germany’s largest chemical companies such as Bayer and BASF will commence on May 30th in Hesse, with executive search and recruitment companies standing alongside trade unions, employees and many others in eagerly awaiting the outcome.
Public Sector Pay Rise Rejected
The Verdi trade union – who represent public-sector workers – actually asked for a larger rise in pay of some 6%, but this was rejected as exaggerated and unrealistic by Thomas de Maiziere, the German Minister of the Interior.
German Economy Still Strong
At present, Germany’s economy remains in good shape, with employment at a post-1991 reunification low of 6.2%. Executive search recruitment and headhunting companies report that the strong jobs market means that chemical industry recruitment is strong, with fewer applicants for each role, meaning that trade unions are in a stronger bargaining position in Germany than is the case in many other countries at present.
Indeed, wages in Germany rose in 2015 by the largest amount since the global economic crisis began in 2008. This has led to an increase in private spending in Germany, which has given a real boost to the German economy and in turn helped to give a continued boost to wages.
All of this contributed to the fact that the German national Gross Domestic Product (GDP) rose by some 1.7% in 2015, almost entirely due to domestic growth and with very little growth in exports. This year, in fact, expectations are that growth in the German economy will continue to be entirely domestically led as overseas demand for German manufactured products – particularly in emerging markets such as China – continues to decline.