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As German jobless rate dips, government urges wage restraint

October 6, 1997

BONN, Germany (AP) _ Germany’s jobless rate dipped last month to 11.2 percent but remained near postwar highs reached early this year, government data showed Monday.

According to figures obtained by The Associated Press, 4.308 million people were out of work in Germany in September, down from 4.372 million in August, when the unemployment rate was 11.4 percent.

In western Germany, the nation’s economic engine, the jobless rate fell to 9.5 percent from 9.7 percent, but in the formerly communist east it remained stuck at 18.3 percent _ meaning nearly 1.4 million people out of work.

The number of unemployed in September was down 64,000 from August but 459,748 above the level of one year ago.

The figures offered only limited relief for Chancellor Helmut Kohl, whose biggest challenge is unemployment as he seeks an unprecedented fifth term in parliamentary elections next September.

The government officially releases the jobless data Tuesday, but leaks to the media are common.

Earlier Monday, Kohl’s government condemned calls by labor union leaders for sharp wage increases next year, arguing that continued restraint was needed to avoid worsening the jobs crisis.

``Aren’t we talking about the end of common sense here?″ Kohl’s chief of staff Friedrich Bohl said on German radio.

Despite a pickup of economic growth, ``we still have not achieved a decisive breakthrough in bringing down unemployment,″ he said. ``My hope would be to make that possible with a continued phase of moderate wage policies.″

A survey by the mass-circulation Sunday newspaper Bild am Sonntag said German labor unions will press for pay rises of an average of at least 5 percent in 1998.

``For employees, 1998 will be the end of timidity,″ Klaus Zwickel, the head of the 2.8 million member IG Metall industrial union, Germany’s largest, told the paper.

Zwickel pointed to sharp rises in productivity, corporate profits and stock prices this year, saying that ``only wages have failed to keep pace with this development in the last few years.″

The government is forecasting the economy will grow by about 3 percent next year.

IG Metall’s next round of contract talks with employers under Germany’s centralized system of wage bargaining is set for the fall of 1998.

Oskar Lafontaine, the leader of the opposition Social Democrats and Kohl’s potential challenger in September 1998 parliamentary elections, has backed the union stance.

However, the head of the German Labor Federation’s Berlin branch, Christiane Bretz, said Monday that the unions would soften their demands if the employers pledge to create new jobs in Germany.

Bohl argued that the nation’s export-dependent economy would be ``brutally punished″ by any wage increases that raise the cost of German goods.

``We cannot spread something around with the watering can that we haven’t even earned yet,″ he said.

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