Despite the German economy showing signs of slow down, IG Metall is pushing for a 6.5% pay increase. The union was offered a 3% instead, but the offer was turned down. Workers in Germany car factories are some of the highest paid as compared to workers in car manufacturing facilities in other parts of the world . In addition, their standard work week is only 35 hours (the legal work week in Singapore is 44 hours).
Interestingly, the German government seemed to be supportive of the union’s recommendation. Wolfgang Schaeuble, Germany’s finance minister, has suggested in an interview that German industrial companies can afford the pay increase since they have benefited from the structural reforms adopted in Germany a decade ago.
The workers may be asked to increase productivity first if they were in Singapore. However, if the demand of the union goes through, loss-making car maker, Opel, may have less bargaining power in asking for concessions from IG Metall.
The union is also going to address the growing public resentment towards the increased pay and benefits that German car makers have been offering senior executives in recent years. It looks like growing income gap has become an issue in Germany as well.