Germany's largest trade union pushes for shorter working hours for 3.9 million workers

Europe's biggest economy is set to grow by 2 per cent this year and unionists say employees should get a share of the success

The union says its driving for a better work-life balance for German workers (Reuters)

Germany’s largest trade union pushed for shorter working hours and 6 per cent more pay for the 3.9 million workers in the metals and electrical sectors on Tuesday, in what it said was a drive for a better work-life balance.

The demand by IG Metall reflects growing self-confidence among trade unions as Europe’s biggest economy is set to grow by roughly 2 per cent this year and unionists say employees should get a fair share of the success.

“There is no reason for restraint,” IG Metall head Joerg Hofmann told reporters, pointing to solid growth in the industrial sector and the economy’s overall strong performance.

The demanded 6 per cent pay hike compares with a national claim for 5 per cent in the last round in early 2016, which resulted in a settlement of a 2.8 per cent increase on 1 July 2016 and a further 2 per cent on 1 April 2017.

Mr Hofmann also called for a fundamental change in the way managers deal with working time. Employees now put a bigger emphasis on work-life balance and this requirement for more flexibility must be reflected in any wage deal, he said.

IG Metall is campaigning for a right to reduce weekly hours to 28 from 35 — with a right to return to full-time work after two years — for shift workers and those caring for children or other relatives.

The union’s strategy reflects changing working preferences of employees who want more private time instead of more pay. Some want to care for their children or ailing parents, others want to engage in communal work.

The head of the employers association Gesamtmetall, Rainer Dulger, has already rejected the demand for a 28-hour week, saying this would exacerbate shortages of skilled workers.

The demands, presented by IG Metall’s board for the 2018 wage negotiations, still need to be approved by its regional branches on 24 October.

The proposal would bring mixed blessings to the European Central Bank’s efforts to get inflation back up to its target of at, or just below, 2 per cent.

A shorter week of 28 hours instead of 35 could lead to less dynamic wage growth in the currency bloc’s largest economy if employers should agree to the demand during negotiations in exchange for an overall more moderate pay hike.

But conversely the need for more workers that this could engender and the demand for 6 per cent wage growth would add to wage pressure.

“If this is the new slogan of upcoming wage negotiations and settlements, don’t expect Germany to take the lead when it comes to wage inflation that would make the ECB happy,” ING Diba economist Carsten Brzeski said.

“If applied in practice, concept proposals by German unions to demand shorter working weeks instead of asking more money will not make the ECB’s life any easier,” he added.

Economists explain the missing link between growth and inflation with the slack in labour markets, meaning there is a high number of people in low-wage jobs, involuntary part-time contracts or temporary arrangements.

Other reasons for sluggish wage growth include the growing trends of automatization, globalization and digitalization that help companies cut costs and avoid steep pay hikes.

Reuters