Criticism of wage agreement - local authorities warn of high costs

The wage agreement for federal and local government employees has been met with criticism in Saxony. As President of the Saxony Municipal Employers' Association (KAV), Meissen District Administrator Ralf Hänsel (CDU) complained that it did not take sufficient account of the municipalities' precarious budgetary situation. It is true that the union had to make significant concessions to its high demands. However, the agreement is too much for municipal employers in Saxony at a time when the municipalities have recorded the highest funding deficit since reunification.

What was agreed

The union and employers agreed in Potsdam that the more than 2.5 million employees would receive more money in two stages. The agreement essentially follows a recommendation made by arbitrators at the end of March. According to the agreement, wages will increase by three percent from April 1, 2025, but at least by 110 euros per month; then by a further 2.8 percent on May 1, 2026. The 13th monthly salary is to be increased.

The package also includes higher shift allowances. The new collective agreement is to run retroactively from January 1, 2025 for 27 months. Warning strikes or strikes in this part of the public sector should be off the table for that long. Separate negotiations for employees in the federal states will take place in the fall.

This is how much the agreement will cost Saxony's employers

According to the KAV, the agreement will mean additional costs of around 820 million euros for municipal employers in Saxony with around 91,600 employees who are bound by collective agreements between 2025 and 2027. The association voted against the agreement, but must now implement it nonetheless, explained Hänsel.