Key Industrial Workers Join German Strike

ECONOMISTS' brows are furrowing over the unusual strike taking place in west Germany this week.

Their main worry is not the garbage and mail pile-ups or commuter chaos caused by the first public-sector strike in 18 years. Rather, they are carefully watching another strike which began in west Germany yesterday: that of IG Metall, the country's trend-setting industrial labor union.

IG Metall is demanding wage increases of 9.5 percent for west German metal workers. Employers aren't budging from their offer of 3.3 percent, so IG Metall initiated a wave of warning strikes yesterday. Worse is in store if employers do not improve their offer, the trade union warns.

"The economic losses [from the public-sector strike] are so far fairly small. What frightens me more is the metal industry," says Peter Pietsch, economist for Commerzbank in Frankfurt. A far reaching metalworkers strike would affect Germany's largest employer, the auto industry.

So far the main effect of the public-sector strike is inconvenience for the public. Up to now, rail service has been only mildly disrupted, and industry has been able to switch over to trucks to move their goods. When negotiations collapsed last week, the parties weren't too far apart: Workers agreed to an arbitrator's suggestion of a 5.4 percent wage increase (down from 9.5 percent), while the government stuck to 4.8 percent.

But, says Mr. Pietsch, "the discrepancy in the metal negotiations is much wider. The employers will be very tough. It's possible they will increase their offer slightly, but not much." Given the trade union's high starting point, it will also be "extremely difficult" for union leaders to ratchet down their demands, he says.

"It will be at least as difficult, if not more difficult" to come to an agreement in the metal industry as it will be in the public sector, agrees Dagmar Opoczynski, a spokeswoman for IG Metall. Higher inflation, productivity gains, and healthy profits are the factors behind the demand for a 9.5 percent increase. Last year, the metal workers received pay and benefits increases amounting to 7 percent.

She says workers are not buying the argument that reunification requires belt-tightening. "Employers say they aren't investing in east Germany because they don't have enough money. Money isn't what's holding back investment. It's other things like poor telephone service, bad streets, or the fact that you can't get apartments or office space there," Ms. Opoczynski says.

The strikes are sending a message to Bonn, Opoczynski says. "[Workers] are not going to be led around by the nose by Bonn and asked to save, when the government itself isn't saving."

No one knows how long the public sector strike, now in its fourth day, will continue. The last one, in 1974, ended on the third day. The public sector union reportedly has a hefty strike fund of 600 million deutsche marks ($363 million). The union says it now wants more than the 5.4 percent offered by arbitrators. Each day the union has broadened its strike, covering new sectors and regions.

Although the government shows no outward signs of giving in, it is calling for a return to the bargaining table. Pietsch sees the upcoming three-day weekend as an opportunity for further negotiations and expresses confidence that the strike - a rarity in Germany - will not last much longer.