development of german collective bargaining and wage policy · development of german collective...
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Development of German Collective Bargaining and Wage Policy
Dr. Reinhard Bispinck
Agenda
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Basics
Decentralization and differentiation
Collective bargaining and wages in the 2000‘s
Bargaining about low pay and precarious jobs
Re-Stabilization of the collective bargaining system
Basics
Collective agreements between union and employers associations and single employers
Multi-employer and sectoral agreements prevailing
Company agreements of minor importance
Totally: 67.000 valid collective agreements
5.800 negotiated agreements in 2011
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Declining bargaining coverage since the 1990‘s
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7673
70 71 70 7068 67
6563 63
6563
6163
5755 56 55 54 53 53
54 5452 51
50 49
6865
63 64 63 6361
5957 56 55 56 56
5452
46 4745 44 44
42 42 41 41 4038 37 37
35
40
45
50
55
60
65
70
75
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Collective Bargining Coverage in Germany 1998-2011, in % of all employees
West Germany East Germany West sector agreements East sector agreements
Source: IAB
Bargaining coverage 2011
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… by sector and employees 2011
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16 40 40 41
46 40
51 50 52 52
63 77
66 86
7 3 4 4
5 15
8 10
11 12
3 3
20 12
- 10 20 30 40 50 60 70 80 90 100
Information/Communication
Agriculture et al.
Hotels and other services
Trade
Economic, scientific, freelance services
Traffic and Logistics
Total
Manufacturing
Non-profit organisations
Health, Education
Construction
Financial Services
Energy, Water, Waste, Mining
Public services, Social insurance
Collective bargaining coverage 2011 by sectors, in % of employees
Sector agreement Company agreement
Source: IAB
Coverage by firm-size
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28
46
62
75
93
59
0
10
20
30
40
50
60
70
80
90
100
1-9 10-49 50-199 200-499 500 and moreemployees
total
Coverage by firm-size, in % of employees
Coverage by income quintiles, in %
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32
41
51
58
68
51
0
10
20
30
40
50
60
70
1.Quintile 2.Quintile 3.Quintile 4.Quintile 5.Quintile Total
Low collective bargaining coverage
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Growing pressure on collectively agreed standards
Persistent mass unemployment since the mid 1990‘s
Increasing international competitive pressure
Shareholder value approach
De-Regulation and flexibilisation of the labour market since 2003
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Decentralization and differentiation of c.a. Flexibilisation at establishment-level with stable
standards e.g. working time flexibilisation within 35-hours-week
Decentralization undercutting the collectively agreed standards
„Wild“ decentralization Pacts for employment and competitiveness at firm-level
„Controlled“ decentralization Company agreements
„Corridors“ in sectoral agreements
Opening clauses
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Opening clauses
Hardship or general clauses Basic pay
(monthly pay, pay increase)
Bonus(annual bonuses, holiday allowances etc.)
Working time (extension, reduction, flexibilisation)
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Issues of opening clauses
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Company level deviations metal industry
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Counter concessions
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Works councils: decentralization „ambiguous“ or „generally problematic“
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Collective agreements and (no) works councils
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Bargaining in the 2000‘s
Key issues
Wages and salaries
Safeguarding employment
Low pay
Precarious jobs
Pension schemes, demographic change
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Collectively agreed pay
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130,1
100,0
105,0
110,0
115,0
120,0
125,0
130,0
135,0
140,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Collectively agreed pay 2000 - 2012, (2000 = 100)
Total
Source: WSI Agreement
Collectively agreed pay
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130,1
121,7
100,0
105,0
110,0
115,0
120,0
125,0
130,0
135,0
140,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Collectively agreed pay 2000 - 2012, (2000 = 100)
Total
Consumer prices
Source: WSI Agreement
Collectively agreed pay
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136,2
130,1
121,7
100,0
105,0
110,0
115,0
120,0
125,0
130,0
135,0
140,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Collectively agreed pay 2000 - 2012, (2000 = 100)
Prices +productivity
Total
Consumer prices
Source: WSI Agreement
Growing differences
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Negative wage drift
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126,7
116,0
100,0
105,0
110,0
115,0
120,0
125,0
130,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Collectively agreed Actual pay
Real wages
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Real actual pay
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Real gross pay 2000-2010 byincome deciles in % (full time employees)
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Source: DIW 2011
The gap is widening again…
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149,9
118,8
100,0
110,0
120,0
130,0
140,0
150,0
160,0
170,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Property and entrepreneurial income Compensation of employees
Source: Destatis
Falling wage share of national income
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Weak private consumption andstrong export in real terms
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105,6
180,6
90,0
100,0
110,0
120,0
130,0
140,0
150,0
160,0
170,0
180,0
190,0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
privaterKonsum
Exporte
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42,236,0
21,319,5
19,018,8
16,716,2
15,114,214,2
10,77,2
6,36,15,7
4,94,84,4
‐1,8
‐5,0 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 40,0 45,0
CZSKIREPLHUFISEDKNLUKUSFR
EU 27GRPTBEITESATDE
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Source: AMECO
Real compensation in Europe 2001-2011 in %
Rapid increase of low wage earners in %
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Low wage earners in Europe
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Bargaining about precarious jobs and low pay
Collective agreements: Equal pay agreements for temp agency workers on company
and sectoral level
Specific collective agreements on pay and conditions with tempagency employer organisations
Sectoral minimum wages on the basis of the posted workersact
Collective agreements on the vocational training capacity and on the takeover of the trainees after completion of their apprenticeship
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Temp agency workers
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Collectively agreed additional allowances in : Metal industry Chemicals Plastics Rubber industry Railway
Temp agency workers
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Additional allowances in metal industry after:
6 weeks: + 15 % 3 months: + 20 % 5 months: + 30 % 7 months: + 45 % 9 months: + 50 %
Temp agency workers allowances in metal sector
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Metal basic pay Temp workers pay Allowance
Re-Stabilization of collective bargaining system
Union efforts:
Regaining organizational power
Improving bargaining coverage
Control for correct implementation of c.a.
Political measures:
Re-regulation of the labour market
Reform of the restrictive extension procedure
More sector-related minimum wages
General statutory minimum wage
Public procurement bound to collectively agreed pay and conditions20-09-2012WSI Summer School 2012 Reinhard Bispinck 37
Summary
Erosion of the bargaining system by continous decline of coverage
Shift from sectoral to company level by decentralisation weakens the binding regulations of the c.a.
Moderate wage development: 2000‘s a lost decade
Increasing low pay sector and precarious jobs trigger collective bargaining activities of the unions
Re-stabilisation of the collective bargaining system requires political and legislative support
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