IG Metall, the powerful engineering and metalworkers' union, said Tuesday it will seek pay hikes of up to 5.5 percent for its 3.7 million members in the upcoming wage round used as benchmark for much of German industry.
IG Metall chief Detlef Wetzel played down concerns that the German economy, Europe's biggest, is facing a renewed downturn.
"Growth remains stable," he told a news conference.
Raising wages by 5.5 percent would help support economic growth as domestic and consumer demand are the primary engines of growth at the moment, Wetzel argued.
"The companies have the means. It's only fair that employees receive their fair share of the profits," he added.
The gloomy scenarios of a downturn "are unfounded," Wetzel continued, pointing that most experts see the German economy growing by 1.2-1.9 percent next year.
The IG Metall board's recommendation will now go to the union's different regional branches for formal approval on November 25.
Pay talks for Germany's key engineering and metalworking sector are carried out on a regional basis and are scheduled to begin in January after the current agreements expire in December.
IG Metall represents a wide range of sectors, from electronics to the auto industry, household electrical goods and semi-conductors. And its pay deals are used as a benchmark for other key sectors of the economy.
In the sabre-rattling that normally proceeds the wage talks, the union frequently calls warning strikes, while employers usually cite the gloomy economic outlook as a reason to cap any wage increases.
The current chronically low level of inflation in Europe's biggest economy will also play into the employers' hands.
The wage negotiations are also being closely watched outside Germany amid calls in countries such as France for Germany to do more to boost the eurozone economy by raising wages.