The Government Should Stay out of Wage Policy Supply — Side Reforms Make More Sense in the Fight against Inflation

How can inflation be contained in Germany? Wages are currently playing a major role in this discussion. Trade unions point out that the current inflation rate of more than 8 percent is reducing employees’ real incomes. Accordingly, IG Metall is calling for an 8 percent wage increase in the upcoming round of collective bargaining. Critics warn that wage agreements at this level could lead to a wage-price spiral and make inflation even worse.