Examining the circumstance of employees within the public sector was also considered by the Commission.
In a significant development, a landmark wage agreement has been reached between trade unions and employers for federal and state government employees in Germany. This agreement, hailed as the "largest wage increase in the public service sector in post-war history," is set to provide a much-needed boost to the salaries of over half a million public sector workers.
The agreement, which comes into effect from March 2024, includes a monthly base increase of 200 euros gross and a percentage increase of 5.5%. For those in the lowest pay grade E13, which applies to employed lawyers and those with completed university education, the starting salary will rise to 4187.45 euros gross per month.
Moreover, kindergarten teachers, currently earning 3,979.52 euros per month, can expect a significant increase of 429.87 euros or 10.8% in their salaries from March 2024.
The agreement also includes a one-time payment of 1,240 euros in June, followed by 220 euros per month from July to February 2024. This additional income is intended to help employees mitigate the impact of the soaring inflation rates experienced last year, which reached 6.9 percent due to the Russian attack on Ukraine. Despite the decrease to 2% in June 2025, inflation remains a concern, with the rate likely to remain at least 5 percent this year.
However, it's important to note that the permanent wage increases in almost all wage groups are likely to be lower than the total price increase since 2021, with only the lowest wage group E1 exceeding this by 16.2 percent.
The negotiations were not without challenges. Municipal employers were reportedly less compromising, and the demanded minimum amount of 500 euros was not feasible. However, the pressure from Verdi's members, including repeated warning strikes, was instrumental in making the agreement possible.
Verdi's chief, Werneke, believes the agreement has weaknesses, including the long duration and the relatively late table-effective increase. Yet, he acknowledges that the agreement would not have been possible without the pressure from Verdi's members, with half a million employees participating in the warning strikes in the weeks before the mediation.
Despite these challenges, Verdi was able to fend off the special sacrifices demanded by employers for employees in the health sector and at savings banks. Additionally, the existing regulation for the takeover of trainees could be extended in the wage agreement.
As the dust settles on this historic agreement, it is clear that the public sector workforce in Germany will be receiving a much-needed wage increase, offering a glimmer of hope in these challenging economic times.
The wage agreement, effective from March 2024, will not only provide federal and state government employees with a much-needed base increase of 200 euros gross and a percentage increase of 5.5%, but will also significantly enhance the salaries of those in lower pay grades, such as employed lawyers and kindergarten teachers. Additionally, the agreement includes a one-time payment of 1,240 euros and additional monthly payments to help employees cope with inflation, which remains a concern despite a decrease from last year's high levels.
