German workers must get higher wage increases: Schulz

‘We have a lot of catching up to do’
|payroll-reporter.com|Last Updated: 02/14/2017
New Social Democratic Party (SPD) leader Martin Schulz addresses a news conference at their party headquarters in Berlin, Jan. 30. REUTERS/Fabrizio Bensch

BERLIN (Reuters) — Germany's centre-left candidate for chancellor Martin Schulz has called for bigger pay rises for workers, an unusual move in a country where wages are traditionally negotiated by managers and union leaders without political interference.

Schulz made his case for higher wages a week after his nomination by the Social Democrats to run against Chancellor Angela Merkel, a surprise move which has seen support for his SPD party jump according to a Forsa poll released on Wednesday.

"We have a lot of catching up to do when it comes to wages," Schulz told the Funke media group in an interview.

The former European Parliament president said the profits of German companies had grown faster over the past decades than the incomes of workers.

"Unions and management should keep that in mind in the upcoming wage negotiations," Schulz added.

Schulz was calling for the higher wage increases in both the private and public sectors.

Germany's federal government posted a budget surplus of 6.2 billion euros in 2016, and while the debate over whether the windfall should be used to pay off old debt or raise public investments, the euro zone's largest economy would have room to finance higher public salary increases.

Real wages for the 19 million workers with collective agreements rose by an average 1.9 per cent in 2016, a study showed in January. That compares with average real wage increase of 2.4 per cent in 2015 and 2.2 per cent in 2014.

Germany's biggest white collar union Verdi has demanded a six per cent pay hike for more than 2 million civil servants and other public sector employees.

A second round of negotiations ended deadlocked on Tuesday, prompting unions to threaten strikes at schools, hospitals, police and administrative offices in the coming weeks. More talks are scheduled for Feb. 16.

Separately, the IG Metall union has sought a 4.5 per cent rise for steelworkers in the northwest, where most of Germany's steel industry is concentrated.

Wednesday's Forsa poll showed support for Schulz's SPD ahead of September's federal election jumping five percentage points to 26 per cent, its highest level in that survey since the last federal election in September 2013.

Support for Merkel's CDU/CSU conservative bloc fell by 2 percentage points to 35 per cent. The right-wing Alternative for Germany (AfD) edged down to 11 per cent, the Left party remained at nine per cent and the Greens party stood at eight per cent.

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