Metal industry labour dispute settled

Around 165,000 Austrian metal industry workers will earn 4.2 per cent more from next month.

Unionists and company representatives agreed about stronger increases of low salaries and one-off payments to employees of the sector in a 14-hour discussion at the headquarters of the Federal Economy Chamber (WKO) in Vienna which ended at 4am this morning (Tues).

Rainer Wimmer of the PRO-GE Union explained workers currently earning little would get 5.3 per cent more as of 1 November. Metal industry staff with high incomes can expect a salary increase of just 3.8 per cent. The agreement means that the sector’s minimum wage will rise from 1,515 to 1,583 Euros.

Reports have it that companies which did extraordinarily badly in the past month may not be ordered to increase staff’s earnings. However, details of this exception have not yet been discussed by Wimmer, GPA Union official Karl Proyer and metal industry representative Christoph Hinteregger.

Austrian Trade Union Federation (ÖGB) President Erich Foglar appreciated the agreement. He said the average increase of salaries by 4.2 per cent would boost people’s spending power, an effect the domestic economy would benefit from. Foglar stressed he was especially pleased about news that low-wage earners’ incomes would rise stronger in percentage points than the earnings of others. He called this decision an “important signal”.

Today’s agreement means that trade unionists succeeded in their call for raises higher than just a compensation of the inflation of the past 12 months. Austria’s average monthly inflation was 2.8 per cent in that period. However, the rate was higher last month (four per cent) and in August (3.7 per cent).

The figures – established by Eurostat, the European Commission’s (EC) statistics and research group – mean that various products and services offered in the alpine country cost four per cent more in September 2011 than in the same month of 2010.

Especially car fuel, food and flight tickets became more expensive in recent months. Surveys have shown that Austrians spend 12 per cent of their income on food on average whereas people who earn little fork out a higher percentage figure on such products. Austria currently has one of the highest inflation rates in Europe.

Some newspapers criticised the metal industry unions for their decision to hold strikes only a few days after the most recent round of wage negotiations started. People’s Party (ÖVP) Economy Minister Reinhold Mitterlehner also expressed critical words. He said on Saturday that strikes were measures which “should be made use of in a careful way.” The minister – whose party forms a government coalition with the Social Democratic Party (SPÖ) – said the union opted for strikes “too soon”. Mitterlehner added he was concerned about the “social peace in the country.”

Wimmer said after the agreement was announced this morning that PRO-GE and GPA decided to organise strikes, in which around 80,000 staff at 200 firms participated, to “prove employees’ determination to company bosses.” Hinteregger replied: “We could have really done without that.”

Wimmer angered Hinteregger already last week by accusing the industry that staff were being told that strong wage increases were out of the question at any time. The unionist attacked firm chiefs for ruling out significant raises “ahead of a crisis, in crisis times and after a crisis.” The PRO-GE official told the national broadcaster he was “sick” of company leaders’ attitude and of “hearing the same arguments year after year.”

Hinteregger pointed out that the Austrian industry may face difficult months and years. He referred to economists’ latest outlook which painted a gloomier picture of the foreseeable future than earlier this year. The Institute for Advanced Studies (IHS) said around three weeks ago it expected the Austrian gross domestic product (GDP) to grow by 1.3 per cent from 2011 to 2012. IHS experts considered a 2.1 per cent rise as possible only last July. The Institute for Economic Research (WIFO) corrected its July forecast of 1.8 per cent to 0.8 per cent.

This morning’s agreement will cost the metal industry around 300 million Euros. The decisions could strongly influence the retail sector wage talks which are set to start tomorrow. Around 500,000 people work in the domestic retail trade. Most of them are women. This fact tempted the labour union to call for special agreements considering female employees’ maternity leaves. Unionists said these time spans must be financially compensated stronger than before – a suggestion which was immediately rejected by employers’ representatives after it was announced. A spokesman said yesterday: “Some extraordinary agreements for certain groups of staff are even counterproductive.” He pointed out that consumers were “unsettled and hesitant” at the moment due to the volatile economic climate across Europe.

Experts recently said the Austrian economy would achieve less growth than initially predicted due to a stagnation or slight decline of people’s purchasing power. These announcements are expected to become retail sector representatives’ major points of view in opposing calls for strong wage increases of employees. They already announced some days ago that almost one in two shops suffered losses in the past months. According to industry leaders, the retail sector must fight hard to be in the black by the end of this year as the downturn of the European economy keeps many shoppers from spending as much as they used to as Christmas is approaching.

The salaries of Austria’s half a million retail trade employees were increased by two to 2.3 per cent last year. Representatives of employers and employees agreed on a plus of 1.5 per cent in 2009 when the global economy was in turmoil. Metal industry wage talks resulted in a 1.45 per cent increase that year. It was the first time that the retail sector incomes rose stronger than salaries of Austria’s 165,000 metal industry workers.

The turnover of the domestic retail sector decreased by 0.1 per cent in the first five months of 2011 compared to the same period of 2010, according to KMU Forschung Austria. The research group also explained that the retail sector trade suffered a 2.3 per cent turnover decline from May 2010 to the same month of 2011. The retail trade of just three other European Union (EU) members did worse, according to KMU Forschung Austria.