On the first day of the series of metal workers’ strikes, workers continue to show their willingness to fight. They would rather protest than accept wage agreements that are too low. Employers are still unwilling to compromise; they counter that each percentage point wage increase costs them 100 million euros.
After no agreement could be reached on Monday, the union has been responding with fighting measures since Tuesday morning. These should last at least until Friday, and the union will not be back at the negotiating table until Saturday.
“We are not afraid of a strike,” Christian Knill, chief negotiator for employers at the KV, said on Tuesday. Many companies prefer a strike to an overpriced deal. “But of course it’s not funny to anyone.”
Employer: “We were able to continue negotiations immediately”
In total, strikes will take place in approximately 200 companies in the coming days. However, the protests would not change the economic facts, Knill said. “It is an action in which perhaps everyone can release some of their frustration – but we can only reach a result at the negotiating table.” The employers are ready for further consultation at any time, “we could also continue negotiations immediately.”
Proven formula with less meaning
Essentially this stems from the unions demanding wage increases of ‘rolling inflation’ plus two percent – i.e. compensation for inflation for a rolling twelve-month period and an allowance. This two percent is “arbitrary,” says Knill. At the start of the talks, workers repeatedly raised the ‘Benya formula’, which provides for wage increases to be offset by inflation plus part of productivity gains.
“Overall economic productivity is negative at 1.3 percent,” the president of the Metal Technology Industry Association (FMTI) told the APA. “According to the Benya formula, the result should therefore be lower than the rolling inflation rate of 9.6 percent.”
“Cannot bear the loss of purchasing power alone”
The companies’ order situation has deteriorated since autumn 2022, Knill said. In the first half of 2023, orders fell by 18 percent. Given this difficult economic situation, companies cannot bear the loss of purchasing power alone, ‘that would break our necks, we simply cannot do that.’ Of the approximately 1,200 companies, 90 percent are small and medium-sized businesses. “These are not the big companies paying dividends and exploiting workers.”
Knill estimated personnel costs in his industry at 10 billion euros, so an increase of one percent would cost 100 million euros. “Our offer – the six percent sustainable plus the one-off payment – averages around 8.2 percent. That means additional costs of 820 million.”
Message to employees: “Pay attention to what you are doing”
Knill called on the strikers to ‘be careful what they do’. Not everything is allowed during a strike: “A strike is a work stoppage, but not a blockage or obstacle to work processes.” If striking employees were to deregister, this would not mean the loss of insurance. The wages for the strike days are deducted from the wages at the end of the month.
The monthly KV minimum wage in the industry is currently 2,230 euros gross. According to employers, the average wage for blue-collar workers is 3,670 euros and the average wage for white-collar workers is 5,100 euros.
Employers already benefited last year
WiFi expert Benjamin Bittschi recently explained that employers in the metal sector are actually well served by using the Benya formula. Here, progressive inflation plus part of the total economic productivity increase is applied. Because productivity progress in the production of goods is greater than in the economy as a whole, this is potentially an advantage for securing competition.
Employee: “The mood is very angry”
At the German mechanical engineering company Trumpf in Pasching in Upper Austria, which has a total of 830 employees, early shift workers reported ready for work, but went on strike. Two pickets were set up at the entrance to the company. Works council boss Alfred Sacher told ORF radio: “The mood is very angry. People expected a lot from yesterday’s negotiations and did not agree with the employers’ improvements. You’re not going to work today. The strike will last until 10 p.m..”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
