Future of Collective Bargaining in Germany and the Importance of the recently introduced Minimum Wage Regulations

Transcription

1 Future of Collective Bargaining in Germany and the Importance of the recently introduced Minimum Wage Regulations Thorsten Schulten Council of Nordic Trade Unions (NFS) & Friedrich Ebert Foundation (FES) Seminar on Wage Formation Oslo, 2 October

2 Content: 1. Trends in German Collective Bargaining 2. Implications for Wage Developments and Economic Performance 3. Recent developments in German wage policy Introduction of a statutory minimum wage Re-strengthening of collective bargaining through improved regulation on extension 2

3 Trends in German Collective Bargaining: Partial Erosion of Collective Bargaining: Decrease of Bargaining Coverage Decentralisation: Use of opening-clauses Fragmentation: Growing gap between core and peripheral workforce / increasing importance of precarious employment Partial Erosion of Trade Union Power: Decrease in Union Density 3

4 Collective Bargaining Coverage in Germany in % West (all agreements) West (sectoral agreements) East (all agreements) East (sectoral agreements)

5 Collective Bargaining Coverage in selected sectors, 2010, in % Public Administration 100 Education 95 Financing 89 Energy 84 Postal services 80 Chemicals Mining Automobile Industry Telecommunication Total Economy Construction Transport Health & Social Services Retail 40 Hotels & Restaurants Garment Industry Wholesale 30 Scientific & Technical Services 27 Automotive Trade IT Services Source: Destatis

6 Collective Bargaining Coverage in different wage quintiles (1 = the lowest quintile), in % Source: WSI LohnSpiegel Database

7 25 Incidence of Low Pay in Germany Workers with a wage below two third of the median wage in % of all workers 24, ,8 Germany has one of the largest Low Wage Sectors in Europe!!!

8 40 Trade union density in Germany Employed trade union members in % of all employees (net density rate) 36, , ,

9 Content: 1. Trends in German Collective Bargaining 2. Implications for Wage Developments and Economic Performance 3. Recent developments in German wage policy Introduction of a statutory minimum wage Re-strengthening of collective bargaining through improved regulation on extension 9

10 Collectively agreed and actual wages in Germany in real terms (deflated by consumer price developments) in % to the previous year 2,5 2,0 2,3 1,5 1,0 1,0 1,3 1,4 1,2 1,2 0,9 1,2 0,5 0,4 Wage Drift 0,3 0,7 0,7 0,7 0,0 0,1 0,0 0,0 0,0 0,0 0,5 0,0-0,1-0,1-0,3-0,3-0,1 1,0 1,5 10-1,1-1,3-0, ,9 Actual wages per employee Collectively agreed wages

11 Economic imbalances in Europe Account balances in Billion Euro 500,0 400,0 300,0 200,0 100,0 0,0-100,0-200,0-300,0-400,0 Surplus States Deficit States Germany Netherlands Sweden Italy Denmark Spain Ireland Austria CZ SI SK HU Portugal Finland Belgium Greece Poland France UK 11

12 Exports, imports and private consumption in Germany , 2000 = Exports Imports Private Consumption 191,6 168, ,

13 Content: 1. Trends in German Collective Bargaining 2. Implications for Wage Developments and Economic Performance 3. Recent developments in German wage policy Introduction of a statutory minimum wage Re-strengthening of collective bargaining through improved regulation on extension 13

14 Introduction of a Statutory Minimum Wage in Germany Introduction of a National Minimum Wage of 8,50 per Hour from 1 January 2015 Temporary exceptions are on the basis of sector-level collective agreements until 31 December 2016 Permanent exceptions for workers under 18 and long-term unemployed (in the first 6 months) Adjustment every two years on the basis of average collectively agreed pay developments decided by a bipartite Minimum Wage Commission (with employers and trade union representatives) 14

15 Minimum wages in Europe per hour, in Euro, LU FR NL BE IE DE* UK SI MT ES EL PT PL HR EE SK HU CZ LV LT RO BU 1,14 1,04 4,56 4,15 3,91 3,35 2,92 2,31 2,30 2,13 2,02 1,97 1,95 1,93 1,76 7,43 9,53 9,11 9,10 8,65 8,50 11,10 * from 1 January 2015; Source: WSI Minimum Wage Database, January ,00 2,00 4,00 6,00 8,00 10,00 12,00

16 Relative Level of Minimum Wages Minimum wage in % of median wage, FR SI PT HU BE LV DE IE LT UK NL PL SK RO ES EL LU EE CZ Lowest agreed MW in the Nordic countries: 60%-70% Source: OECD

17 Introduction of a Statutory Minimum Wage in Germany Between 3 and 4 Million workers will get a wage increase because of the MW Wage development of low wage workers in line with development of collectively agreed pay Wage floor which stabilise collective bargaining Problems: Relatively low level of the MW Enforcement of MW 17

18 Extension of Collective Agreements in Germany A quorum of 50% CB coverage Extension in public interest Confirmation of national CB Committee Collective Agreement Act (1949) Yes Yes Yes Posted Workers Act (1996/2009) Content of No limitation Limited to minimum extended agreements wages etc. Sectoral Coverage Total Economy Limited to certain sectors No Yes No Level of regulation National and regional agreements Only nation-wide agreements. 18

19 % Extended CA on the basis of the Collective Agreement Act* ,4 5,1 4,8 4,7 4, ,1 3,8 3,5 3, , ,6 2,5 2, ,0 1,8 1,5 1,5 1,5 1,5 1,5 1,7 1,7 1, * Only original agreements without parralle or amending agreements Source: MInistry of Labour, Calculations by the WSI 19 n

20 Extended CA on the basis of the Posted Workers Act* Sector-wide minimum wages in Euro per hour Sector West East Construction 11,10/ ,50 Roofing 11,55 11,55 Electro trade 10,00 9,10 Painting 9,90/12,50 9,90/10,50 Stonemason 11,25 10,86 Mining services 11,92/13,24 11,92/13,24 Cleaning 9,31/12,33 7,96/10,31 Scaffolder 10,00 10,00 Waste Disposal 8,86 8,86 Security Services 7,50-8,90 7,50 Care 9,00 8,00 Meet industry 7,75 7,75 Further Training 13,00 11,65 Temporary Agency Work 8,50 7,86 20

21 Extension of Collective Agreements in Germany A quorum of 50% CB coverage Extension in public interest Confirmation of national CB Committee Content of extended agreements Collective Agreement Act (1949) No Yes Yes No limitation Posted Workers Act (1996/2009) No Yes No Limited to minimum wages etc. Sectoral Coverage Total Economy Total economy Level of regulation National and regional agreements Only nation-wide agreements. 21

22 Bargaining Coverage and the Use of Extension frequent use of extension or functional equivalents rare use of extension or functional equivalents no use of extension or functional equivalents AT BE FR SI SE FI DK IT NL NO ES EL DE LU MT CH CY IE CZ SK HU PT* UK PL EE LV RO BG LT US Source: ICTWSS Database (Version 4.0), national sources; * including public sector 22

23 Conclusion: 1. Introduction of the minimum wage and improved regulation on extension have the potential to strengthen collective bargaining and wage formation in Germany 2. Important institutional reforms to support a necessary change towards a more expansive and more solidaristic wage policy 3. Trade unions have the challenge to transform the somewhat improved framework conditions to strengthen their organisational power basis 23

24 Public Image of German Trade Unions in % of all persons surveyed* positive negative * Missing figures to 100% = undecided Source: Allensbach Instituit für Demoskopie

25 Further Information: WSI Collective Agreement Archive: Further Reading: 25