Inflation premium: why it could be detrimental to employees
Created: 09/11/2022, 17:18
By: Lisa Mayerhofer
In a nationwide collective bargaining dispute in the metal and electrical industry, IG Metall is demanding more wages, but the employer side would rather pay the inflation premium instead.
A dilemma.
Berlin – Up to 3,000 euros – this is how much money employers are allowed to pay their employees as an inflation premium tax- and duty-free.
According to the government, the permissible special payment is intended to relieve workers who are struggling with the sharp rise in energy and food prices.
But for employees, the bonus can prove to be a double-edged sword, as a current debate shows.
IG Metall and employers: inflation premium instead of tariff increases
This affects the current collective bargaining in the metal and electrical industry - which has so far been without agreement.
In the nationwide collective bargaining dispute, IG Metall is demanding eight percent more wages for a contract term of twelve months.
Employers offered a one-off payment of 3,000 euros net for a period of 30 months, as well as an unspecified increase in the wage tables.
So in the end: the tax-free inflation premium for employers.
Their payout is possible until December 24, 2024.
But IG Metall would rather fight for a permanent salary increase and not be satisfied with the inflation premium offered.
"The offer lacks the power," said the district manager of IG Metall Coast, Daniel Friedrich, after the failed third round of collective bargaining, mockingly referring to the words of Chancellor Olaf Scholz (SPD).
The offer was merely "alms", explained IG negotiator Jörg Köhlinger.
Inflation Premium: Bonus or Substitute for a Salary Increase?
This also shows how differently trade unions and employers define the inflation premium.
Some see it as an additional bonus, others as a substitute for a salary increase.
Hagen Lesch, collective bargaining expert at the employer-related Institute of German Business, explains in
Business Insider:
“The inflation compensation premium is intended to relieve both employees and employers.
However, it is not an offer that should be negotiated in addition to the collective bargaining rounds.
It is not intended that a company pays higher salaries and then also pays out the bonus.
The idea of the federal government was not to generate any permanent cost burden for the companies, which then sets a wage-price spiral in motion.”
A wage-price spiral describes the risk that rising wages as a reaction to high inflation could continue to drive prices up over the long term.
However, this fear is disputed.
The International Monetary Fund (IMF), for example, sees only a small risk in this regard.
For employees, however, it could mean that many companies will try to meet higher wage demands with offers of one-off payments - or reject them altogether.
(lma/dpa)
