Financing for companies – wage increases are partly paid by the state

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The union-affiliated Momentum Institute points out that a significant portion of wage increases are not paid for by companies anyway – if you take into account corporate subsidies.

“In total, state aid to companies will amount to around 6.4 billion euros in 2024. This corresponds to more than if all wages – outside the metal industry – were increased by 2.5 percent with the offer from the employers of the metal workers,” the institute says.

Numerous state aids for companies
This wage increase would cost companies 4.3 billion euros, 2.1 billion euros less than the amount that the government will subsidize companies next year. If wages were to rise by the 11.6 percent demanded by unions for metal workers, it would cost 19.8 billion euros. If the social partners agree on an annual inflation rate of 9.6 percent, the costs would amount to 16.4 billion euros.

The Momentum Institute is counting on a billion in state subsidies for companies through corporate tax cuts. The companies were left with 382 million by reducing the employer contribution to the family burden equalization fund (FLAF). The energy cost subsidy (1.88 billion euros) and the associated authorization (1.5 billion euros) brought a total of 3.38 billion euros into the companies’ coffers.

The corona aid will continue in 2024
“In 2024, there will be 584 million euros in Corona support for companies. The federal government is making 683 million euros available for the investment bonus. Employer contributions to unemployment insurance will also be reduced for companies, and this tax bonus will cost another 157.5 million euros,” the APA said.

Source: Krone

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