We start in Germany, more accurately in Nordrhein Westfalen, which is a region of Germany known for its blue collar mining and steel industries more than the fancier parts of German industry like Bavaria and Baden-Würstemberg. 

Here the local union arm of IG Metall, which represents more than 50.000 people, is preparing for its upcoming wage negotiations starting November by proposing some drastic demands. They are asking for an 8.5% wage increase plus the introduction of a 4 day work week.         

IG Metall says that due to the pressures on employees in the steel industry due to the green transformation a 4 days week is a good idea, which is countered by the employers saying that they are having a difficult time already finding qualified workers. 

We note a couple of things here. 

Firstly, that the negotiations are set to start in November by which time the German manufacturing sector might be even worse off than today given both hard and soft data. That means IG Metall is incentivized already now to raise demands since by the time we hit November they could be in a worse starting point in terms of negotiations. In short. Is IG Metall just trying to squeeze the last bit of juice out of the orange before the party is over? 

Chart 1: Vacancies getting filled. The Ukraine effect or first signs of labor weakness?