Record increase in June: 8.4 percent more wages in new collective labor agreements | Economy

2023-06-29 18:06:58

Jun 29, 2023 at 6:01 PM Update: an hour ago

Wages in new collective labor agreements rose by an average of 8.4 percent in June, which is a record. This means that wages are rising faster than prices, because inflation was 6.1 percent in May.

Despite the unrest and strikes in many sectors, many collective labor agreements are concluded. This month there were 28 collective labor agreements for 250,000 employees, according to provisional figures from employers’ association AWVN. “A number of collective agreements still have to be processed, so it might be even higher,” says a spokesperson.

On an annual basis, wages will rise by an average of 7.4 percent, which is an unprecedentedly high increase. Wages rose the fastest in the paper industry, industry, food sector, wholesale, chemicals, retail and government.

Due to the sky-high inflation, the purchasing power of employees in various sectors has been under pressure for a long time. They have difficulty paying their energy bills or run into problems at the end of the month.

In September last year there was even an inflation of 14.5 percent. For the trade unions, this is a reason to go for a hefty wage demand during the collective labor agreement negotiations.

Wage growth will weaken in the coming months

In sectors where workers are experiencing a loss of purchasing power, employers are still prepared to pay the bill. This was the case last week in collective agreements for supermarkets, drugstore chain Etos and care for the disabled. The more than 500,000 employees can count on wage increases of at least 10 percent.

But the AWVN expects wage growth to weaken in the second half of this year. “The biggest increase is now over, which is inevitable with these record levels. In addition, inflation will be measured differently from now on. Furthermore, many companies are uncertain regarding the current economic situation,” says the spokesperson.

There are also fears of the so-called wage-price spiral. If higher wage costs are passed on in prices and these higher prices then lead to higher wage demands, such a wage-price spiral can arise.

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