Inflation: Scholz wants tax-free one-off payment - ifo boss Fuest: "Doubt that it's wise"

Created: 06/27/2022, 11:56 am

By: Lisa Mayerhofer

Chancellor Scholz proposes a tax-free one-off payment from employers because of the high inflation.

Economists, trade unions and employers react with criticism.

Berlin – The sharply rising energy and food prices are causing Germans' real wages to melt away – many people have less and less money available for living expenses.

Trade unions such as IG Metall and Verdi are therefore demanding wage increases.

Under these circumstances, economists fear a wage-price spiral: companies raise prices when they have to pay higher wages, whereupon workers demand higher salaries again and companies in turn raise prices.

This process would then continue to fuel inflation.

Inflation: Chancellor Scholz plans tax-free one-time payment by employers

Chancellor Olaf Scholz (SPD) is therefore planning the possibility of a tax-free one-off payment from the employer as compensation.

For this, the unions should forego part of the wage increases in collective bargaining rounds in order not to further fuel inflation, as reported by the

.

Corresponding plans were confirmed to the German Press Agency from government circles.

Chancellor Olaf Scholz (SPD) speaks.

© Fabian Sommer/dpa/archive image

"If employers and unions agree on one-off payments to employees in order to cushion particularly difficult moments in the coming months, then the state could also supplement this in a meaningful way," said SPD parliamentary group leader Rolf Mützenich to the newspapers of the Funke media group.

Tax-free one-off payment: trade unions and employers reluctant

However, trade unions and employers reacted rather cautiously to the idea of ​​tax-free one-off payments.

Yasmin Fahimi, chairwoman of the German Trade Union Confederation (DGB), told the

that she welcomes the fact that the Chancellor is looking for socially acceptable solutions together with the employers.

But she also expressed skepticism: “The aim of concerted action must be to reduce the current burdens on private households and the economy and to develop a more resilient and sustainable economy.

But it is also clear that collective bargaining is not conducted in the Chancellery.”

Employer President Rainer Dulger also emphasized: "Collective bargaining is not conducted in the Bundestag." Hints like that of Mützenich could make negotiations more difficult than easier, Dulger told the newspapers of the Funke media group (Sunday).

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Ifo President: "Doubt it is wise for the government to demand one-off payments"

The economists surveyed were also rather critical.

The President of the Munich ifo Institute, Clemens Fuest, explained in the

that one-off payments would make it easier to react later to unforeseen developments.

"However, setting wages is a matter for the collective bargaining partners, not the government," Fuest told the newspaper.

"I therefore doubt that it is wise for the government to demand one-off payments."

According to Fuest, the trade unions in particular have already said that they will not let themselves be dictated to how they conduct their collective bargaining policy.

"The chances that this path will be taken could decrease because politicians have demanded it."

DIW boss: Many employees are not subject to a collective agreement and fell through the cracks

The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, considers special payments from employers to be of little use because too many people would fall through the grid of the welfare state.

He said: “Higher wages and benefits are the only sustainable way for low-income people to sustain higher energy and food prices.”

Because: Only 43 percent of the employees are paid according to the collective agreement - an agreement with the unions would not necessarily reach them.

For them, but also for pensioners, additional measures are still needed, which are still being worked on, writes the

.

After all: The director of the German Economic Institute (IW), Michael Hüther, considers the variant proposed by Scholz to be “a tried and tested instrument” in collective bargaining and salary increases in the current situation.

"Here, as with the Corona premium, the state could make these payments tax- and contribution-free, up to a maximum amount per year," he told the