Moderate wage increases don't create jobs

IMF, 10 Feburary 2000

The German metalworkers' union says that restraining wage demands has not generated an increase in metal industry employment.

GERMANY: The Research Department of the German metalworkers' union, IG Metall, states that one reason for the union's current demand of a 5.5% wage increase in the 2000 collective bargaining round is that moderate demands do not appear to create more jobs.

Between 1991 and 1999, the level of employment in the German metal industry fell from 5,048,000 to 3,486,000, or a drop of 31% in jobs. However, during this same period, profits in the metal industry rose by 22%, from DM 34.1 billion to DM 41.6 billion. This proves, says the union, that moderate collective bargaining results, contrary to the claims of employers and neo-liberal economists, do not generate more jobs.

The first round of this year's bargaining for the German metal industry ende on February 9 without results.