The approximately 930,000 employees in the German construction industry should receive more money. The negotiating commission of the IG BAU union said it agreed to the arbitrator’s proposal that income should be increased by 250 euros per month on May 1, 2024.
Eleven months later, another 4.15 percent in the west and 4.95 percent in the east will be added. The training allowance in the first year of training should be 1,080 euros in both East and West, and the duration should be two years. “We grudgingly support the saying,” said the chairman of IG BAU, Robert Feiger. Now it’s the employers’ turn.
According to the Central Association of the German Construction Industry, voting will now take place in the member associations of the employers’ collective agreement until May 3, 2024. If the employers do not agree to the proposal, “then of course there will be industrial action. The mood among construction workers is highly explosive,” warned Feiger. The union boss wants to recommend that the union’s Federal Collective Bargaining Commission approve the arbitrator’s decision. “We are taking responsibility for society as a whole, because there is a construction traffic jam in Germany.”
IG BAU had previously declared collective bargaining to have failed after three unsuccessful rounds. This triggered a contractually agreed arbitration procedure. The former President of the Federal Social Court, Rainer Schlegel, acted as an arbitrator in the talks in Wiesbaden.
IG BAU had demanded 500 euros more wages, salaries and training allowances per month for a period of one year. The employers of the ZDB and HDB industry associations had offered two salary increases of 3.3 percent for this year and 3.2 percent for next year. They had referred to the crisis, particularly in housing construction, and accused the union of completely ignoring it.
Construction crisis hits industry hard
The construction industry is one of the largest employers in Germany and, with sales of around 162 billion euros in 2023, according to the construction industry association ZDB, an important pillar for the German economy. The industry had supported the economy for years during the real estate boom, but now it has become a problem child due to the crisis in housing construction.
Because of increased interest rates and expensive materials, housing construction is in crisis, and the federal government’s new construction target of 400,000 new apartments per year is out of reach. According to DZ Bank estimates, the number of annual completions could fall to 200,000 apartments by 2025. Building permits have been going downhill for many months; they fell by a good 18 percent in February compared to the same month last year. The Ifo Institute recently announced that the mood in housing construction remains tense. Every fifth housing construction company reports cancellations.
