Federal and Municipal Public Sector Employees to Receive 11% Salary Increase and Inflation Compensation

In view of the high inflation, employees in the public sector at federal and local level get more money: employers and unions agreed on higher tariffs late on Saturday evening after several hours of negotiations in Potsdam. This was shared by all parties involved. This agreement affects 236,000 employees in Baden-Württemberg and 2.5 million people nationwide. According to the ver.di trade union, the average salary increase will be more than eleven percent from 2024. According to ver.di, there will be piecemeal one-off payments as an inflation premium in 2023, which, due to the net payment, already had the effect of an anticipated increase in salaries this year.

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More strikes due to collective agreement off the table

A strike ballot among the unions and possible indefinite strikes are off the table with the agreement. The bargaining parties had been negotiating with each other for months. Again and again, the employee representatives had paralyzed administrations, city cleaning and swimming pools with warning strikes. At the end of March, ver.di, together with the railway and transport unions, brought both rail and air traffic to a standstill nationwide during a large-scale warning strike. “Thanks to an unprecedented collective bargaining movement this spring, it was possible to fight for and enforce a collective bargaining result that we will now present to our members for consultation,” said Martin Gross, ver.di regional manager in Baden-Württemberg, after the collective bargaining agreement.

ver.di Baden-Württemberg: Results contain strong social components

In a statement from the union, Martin Gross gives examples of what the collective bargaining agreement means in detail for the employees – depending on their grouping: in the area of ​​waste disposal, the monthly plus could be around 357 euros, for administrative employees just under 400 euros. Gross speaks of almost 430 euros more money per month for educators and around 400 euros more for a nurse. According to ver.di, the remuneration of trainees will be increased by 150 euros.

“We were able to avert the complete social blindness of the employers, who lined up to give more percentages above than below,” emphasizes Gross. The result now contains a strong social component, “because in the first year everyone gets the same one-off payments, from garbage disposal to the top officials. And because in the table below twice as much is added – up to more than 16 percent – as at the top with just under more than eight percent,” the ver.di regional manager continued. This refers to the lowest or highest salary group.

“The actual minimum amount of 340 euros is the biggest toad we had to swallow because a real and higher minimum amount would have been better and fairer.”

Nevertheless, Gross is not entirely satisfied: “Even the highest wage increases in the public sector in 49 years are not enough to heal all the wounds inflicted by inflation.” The de facto minimum amount of 340 euros is “the biggest toad” that one had to swallow, according to Gross.

Praise from the German Police Union and GEW

The German Police Union (DPolG) in Baden-Württemberg has described the collective bargaining agreement in the public sector with the federal and local governments as a benchmark for upcoming negotiations with the state. “This is not only a good result, but it is the guideline for the collective bargaining in the fall,” said DPolG state chairman Ralf Kusterer on Sunday. Then it’s about the national tariffs, which also affect employees in the police force.

The Education and Science Union (GEW) described the wage agreement as a “good compromise”. Maike Finnern, national chairman of the GEW, emphasized that the employees “will have significantly more money in their pockets from June to be able to absorb the current price increases.” From March 2024, real wages would be stabilized because salaries would then rise noticeably, according to Finnern.

Inflation compensation of a total of 3,000 euros

According to the Federal Ministry of the Interior, this year’s collective bargaining agreement provides for a tax and duty-free inflation adjustment of a total of 3,000 euros in installments. EUR 1,240 of this is to be paid out this June, followed by a further EUR 220 in each of the months from July to February 2024.

As of March 1, 2024, the fees are to be increased by an amount of 200 euros in a first step. In a second step, the amount then increased should increase again linearly by 5.5 percent. In any case, the increase should be 340 euros. The term should be 24 months.

With this solution, the parties to the collective bargaining largely based themselves on the compromise proposal from the arbitration proceedings that ended a week ago. The trade union ver.di announced that a member survey was now being started. The Federal Tariff Commission will then decide on May 15th.

Federal Minister of the Interior Nancy Faeser (SPD) spoke on Saturday evening in Potsdam of a “good and fair collective bargaining agreement” that would bring noticeable relief to employees. “We have accommodated the unions as far as we can still be responsible for in a difficult budget situation.” According to ver.di boss Frank Werneke, the negotiations were not easy. “With our decision to make this compromise, we went to the pain threshold,” he said. ver.di and the German Association of Civil Servants (dbb) had originally requested 10.5 percent, but at least 500 euros more per month.

Agreement is a financial challenge for municipalities

The solution found poses particular challenges for the many cash-strapped municipalities in Germany. The President of the Association of Municipal Employers’ Associations, Karin Welge, had estimated the additional costs for cities and municipalities on the basis of the arbitration proposal at 17 billion euros before the negotiations. Welge describes the result achieved as the “most expensive collective bargaining agreement of all time”.