Austria: high wage increases in the chemical and electrical engineering sectors

The social partners in the chemical (47,000 employees) and electrical engineering (67,000 employees) sectors have negotiated average wage increases of 4.75% and 5%, respectively, over one year, both of which are valid from 01 May 2022. In neither case will the salary increases be less than €120 per month for the chemicals sector, or €130 per month for the electrical engineering sector. This clause will mean those on the lowest salaries will benefit from increases of up to 5.9% and 6.7% respectively in these sectors. Negotiations had nonetheless got off to a bad start, with the employers refusing the union demands. In March, the unions came forward with record demands of around 6%, in an attempt to partially make up for inflation that hit 6.8% in that month. The threat of warning strikes, combined with the inexorable rise in inflation in April (+7.2%), finally pushed the employers’ federations to quickly accept these higher than usual increases. In fact, despite the fuel-related risks, both sectors, which are still very profitable, can still largely accommodate the salary rises. Companies in these sectors are currently primarily concerned with supply chain problems. For the first time in a long time, therefore, it will not be necessary to wait for October’s major metal industry negotiations in order to gauge the trend in collective agreements in Austria.