Volkswagen Approves Raise for German Workers

July 28, 2016

Unlocking Word Meanings

Read the following words/expressions found in today’s article. 

1. scandal / ˈskæn dl / (n.) – an event that destroys a reputation
Example: The labor abuse scandal destroyed the company’s reputation.

2. stipulation / ˌstɪp yəˈleɪ ʃən / (n.) – a condition in an agreement
Example: A stipulation in the contract requires companies to give laborers an hour-long lunch break daily.

3. contribution / ˌkɒn trəˈbyu ʃən / (n.) – payment
Example: The company takes his contribution to his pension fund from his salary.

4. inflation / ɪnˈfleɪ ʃən / (n.) – in economics, an increase in the rise of prices in connection to the increase in the amount of money in circulation
Example: When inflation gets too high, you cannot buy a lot with your money.

5. pay down / peɪ daʊn / (idiom) – to reduce a bill by paying part of it
Example: I pay down my bills because I can’t pay them in full.


Read the text below.
Car manufacturer Volkswagen (VW) agreed to a 4.8% pay raise for around 120,000 of its German workers by next year.

The announcement came in the wake of the company’s scandal last year, the effects of which are still being felt by the company. In 2015, US authorities found that VW equipped their cars with software that enabled them to cheat on diesel emission tests.

Although the company recorded a 4.1-billion euro operating loss for 2015 because of the scandal, the IG Metall labor union sought a 5% pay raise over the next 12 months for the workers. Worker representatives made the demand on the grounds that they should not suffer the consequences of the management's choices. Among the stipulations in the deal are a 2.8% hike on September 1, 2016 and another 2% hike on August 1, 2017.

Other worker benefits in the deal are a 200-euro pension contribution and an extended part-time working scheme. However, the pay deal is currently limited to VW's German workers, and does not cover car workers in Audi [OU-dee] and Porsche [PAWR-shuh], both of which have VW as a parent company.

Increasing wages could increase inflation in Germany, which, in turn, could increase inflation in all other member nations of the European Union (EU). This is an advantage, as the present low levels of inflation hinder indebted countries in the EU, such as Greece and Italy, from paying down their debt.

Viewpoint Discussion

Enjoy a discussion with your tutor.  

Discussion A

·         Do you think it is reasonable for workers to ask struggling companies for a pay raise? Why or why not?
·         What are other events that can destroy a company’s reputation?

Discussion B

·         If a country went into debt, should other countries help it? Defend your answer.
·         What are some non-monetary benefits workers can ask from their employers?

July 28, 2016