Union Head Warns of Free Fall in Wages | Business| Economy and finance news from a German perspective | DW | 19.12.2004
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Union Head Warns of Free Fall in Wages

The head of Germany’s largest trade union said on Sunday wages in Europe’s largest economy were at risk of “free fall” because of government reforms due to take effect in January. In an interview on DeutschlandFunk Radio, Verdi services union chief Frank Bsirske said “it has become clear that Germany needs a minimum wage. “I think it has become clear this year… that our society needs to take action in this area because wages risk going into free fall, through (the labor reforms) and the so-called freedom of services in the European Union,” he said. Germany’s labor market reforms, referred to as Hartz IV, allow unemployment benefit offices to cut state support for those who refuse offers of work or training. The rules will also force jobless people to take wok paying up to 30 percent below going rates. Trade unions campaigned against the reforms on the grounds it could undermine existing wage deals. Calls for a country-wide minimum wage have so far been rejected by the government.

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