Minimum wage deal for German construction sector

Sun Jun 22, 2008 3:17pm BST

BERLIN, June 22 (Reuters) - German construction employers and trade union officials have reached a compromise on a minimum wage for the 700,000 workers in the sector.

Under the deal, which needs to be formally approved by all parties by July 4, the minimum wage for construction workers in the former East Germany would remain unchanged for a year at 9 euros an hour for unskilled and 9.80 euro for experienced staff.

In western Germany, the hourly minimum wage would rise from Sept. 1 to 10.70 euros from 10.40 for unskilled workers and to 12.85 from 12.50 for skilled staff.

Both the construction industry association ZDB and the union IG Bau confirmed the deal over the weekend.

Employers had initially sought to get rid of the fixed minimum wage for skilled workers and keep one only for unskilled labourers.

Construction investment, supported by mild winter weather, helped fuel a robust 1.5 percent quarter-on-quarter expansion in German gross domestic product (GDP). But a survey of construction firms released in early June showed that activity in Germany's building sector had shrunk for a third consecutive month in May.

The construction industry is one of several covered by a sector-wide minimum wage deal and the parties in Chancellor Angela Merkel's "grand coalition" have been fighting about whether to extend minimum wages to other sectors.

(Writing by Noah Barkin; Editing by Paul Bolding)

((noah.barkin@reuters.com; +49 30 2888 5091; Reuters Messaging: rm://noah.barkin.reuters.com@reuters.net)) Keywords: GERMANY CONSTRUCTION/WAGES

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