The Chancellor proposes that the unions refrain from demanding wage increases and receive tax-free one-off payments in return. Economist Sebastian Dullien knows if that’s wise.

On July 4, Olaf Scholz wants to talk to the unions and employers about measures to relieve employees when prices rise – a so-called concerted action. Now his proposal for the negotiations has been made public:

What exactly does Olaf Scholz imagine?

Employers should pay their employees a one-time inflation adjustment. The trade unions waive part of their wage claims and the state does not tax the bonus. In this way, the payment lands one-to-one on the employee’s account.