German Industry Faces 8.5% Pay Increase From Union Deal

Germany’s largest labor union and employers agreed on two rounds of wage increases for industrial workers, averting the threat of strike action in Europe’s biggest economy.

The IG Metall union said Friday the deal in the state of Baden-Wuerttemberg will raise pay 5.2% next year and 3.3% in 2024, on top of €3,000 ($3,110) in tax-free bonus payments to counter inflationary pressures. The union has recommended the agreement to eventually cover some 3.9 million workers in Germany’s industrial sector to help compensate for soaring living costs.

“Employees will soon have significantly more money in their pockets — permanently,” IG Metall chairman Joerg Hofmann said in a statement. The deal represents a 8.5% wage increase, the union said, without clarifying how it calculated the hike.