German public sector workers have agreed a pay deal with employers, Home Minister Nancy Faeser and the Verdi union said on Saturday, ending a dispute in the transport sector in Europe’s largest economy. The contract for about 2.5 million workers in the industry comes after arbitration.
According to the ministry’s statement, each worker will be tax-free in the amount of 3,000 euros until February 2024, up from 20,000 euros. From March 2024, it will increase by 200 euros per month, and in the second step it will increase by 5.5%. The agreement will last two years.
Verdi, which is seeking a 10.5% higher payment, said it will begin with a May 15 decision by its member research institute. “We have reached a pain point with this settlement decision,” Verdi chairman Frank Wernecke said.
This year’s rising cost of living has led to the fewest strikes in Germany in decades. German consumer prices are expected to rise 9.6% in 2022, but price pressures have eased in recent months as the winter energy crisis subsides and supply chain issues ease.
“This agreement provides significant relief for workers. Tax-free payments will quickly appear in the wallet,” said Secretary of the Interior Nancy Faeser. Last month, strike action by Verdi and the DBB union brought railways and airports to a standstill in Germany’s last strike in more than a decade, Verdi said.
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