Record inflation: what measures are being taken for wages in Italy, Germany and the United Kingdom?

With inflation exceeding 10% on average throughout the European Union, all the neighboring countries of France are faced with the question of purchasing power. Who says purchasing power says wages. Everywhere, the rise in prices greatly exceeds them. And everywhere, employees are demanding significant increases. Overview of the responses provided in Italy, Germany and England.

Subsidies on contributions in Italy

In Italy, inflation reached 9%. Faced with this general rise in prices, the government of Mario Draghi regularly passes decrees called “aiuti“, which means “aid”. For the moment, three decrees of this type have been signed. They concern employees who earn less than 35,000 euros gross annually. They have benefited since July and at least until the end of December of a reduction in employee contributions, which goes from 9% to 7%, which represents a gain of €25 for a salary of €2,000. It is up to employers to apply it, even if it costs them nothing.For the less wealthy, those who earn less than €1,500 per month, a bonus of €150 is also distributed.

Not enough to satisfy the unions, which are demanding general wage increases. They also demand the creation of a minimum wage, which does not exist in Italy. Sporadic demonstrations are also organized to symbolically burn gas bills, electricity and water, in particular before the Italian Caisse des dépôts et consignations, majority shareholder of the large oil group ENI. Here, these large groups are supposed to pay an additional tax on superprofits to finance the government’s measures. The government also encourages companies to reimburse the invoices of their employees up to a limit of €600, which will then be deducted from the company’s results.

In Germany, an increase in the Smic

Inflation is also very high in Germany, where price increases reached 10% over one year in September. Across the Rhine, negotiations on wages will soon open. If the unions often ask for double-digit increases, the first step was more modest. On October 1, Chancellor Olaf Scholz increased the hourly minimum wage by 15%, as promised during his campaign. It therefore went from €10.45 to €12. The measure was eagerly awaited and benefits just over six million people out of the 45 million German workers.

In this complicated context, other employees are also waiting for wage increases. Among the sectors that are preparing to negotiate their salary scales, there is the steel industry, chemicals, automobiles and electronics. To compensate for the surge in prices, IG Metall, the first German union, is demanding an 8.5% increase and has promised a strike if no agreement is reached before the end of the month. We must also expect walkouts in companies during these negotiations, as the increases requested are significant.

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Especially since all the unions are demanding this wage increase and are even engaging in a form of one-upmanship. Verdi, another union, thus sets the minimum threshold for an increase at 10.5% for the 2.5 million civil service employees. A few days ago, employers called on Verdi to show restraint in his demands and to take into account the situation of companies. Because this mobilization of the unions is added to the long list of concerns of employers, who must already deal with the soaring prices of raw materials, transport, gas and electricity.

In the UK, increases well below record inflation

The United Kingdom is not spared by inflation, on the contrary. The country has one of the highest inflation rates in the G7, at 10.1%. Energy prices in particular have soared, bills have nearly doubled in a year and could rise by 80% from April when the gas and electricity price freeze ends. Gasoline and food prices are also constantly rising. Faced with this, the increase in wages is timid in the country, with an average increase of 6% in the private sector and 2.2% in the public sector. Unsurprisingly, social discontent is therefore being felt, especially since the political situation is very vague, with a Prime Minister, Liz Truss, who has just thrown her entire economic policy out the window.

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In the country, strikes are multiplying. Despite the famous motto “Keep calm and carry on” – the British decided to raise their voices. Railway workers and postal workers are particularly mobilized. The union of Royal Mail, the British post office, has already organized six days of strikes recently and threatens to stop for 16 more days spread over three months. This would disrupt Christmas deliveries. Another movement is also gaining momentum across the Channel: “Enough if enough”, translated by “Too much is too much”. The movement intends to fight against the cost of living crisis and tries to find solutions for the poorest families.

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