25 September 2023

GERMANY: PS payrise to boost economy

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A significant pay rise awarded to German Public Servants has increased hopes that consumer spending could buoy growth in the European Union’s largest economy.

Unions representing about one million German public sector workers have agreed to a deal that will mean pay rises of 8.8 per cent over the next three years.

While Germany is seeking to improve services such as day care for working mothers, it has struggled to fill positions because pay is low and there are plenty of other job openings with unemployment in the country at a record low.

Under the new contract, German States will retroactively raise wages by 3.2 per cent from January.

A second 3.2 per cent hike will follow in January next year, with a 1.4 per cent increase in January 2021.

Pay structures will also be adjusted to boost earnings for entry-level staff.

Chair of the Verdi Union, Frank Bsirske (pictured) described it as “the best result in many years and a good day for Civil Service employees”.

“We’ve sustainably improved the attractiveness of the Public Service for career starters and skilled workers,” Mr Bsirske said.

“That’s a win for both unions and employers.”

The wage increase could provide some support for European Central Bank policymakers as they grapple with weak underlying price pressures in the euro area.

Berlin, 5 March 2019

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