Germany: Public sector workers score a qualified win

Issue 

About 215,000 public service workers struck on March 27 as a warning to their employers a day before talks between the public sector union and the bosses.

Two weeks earlier, 130,000 took part in the first round of strikes. The award being negotiated by the United Services Union (known as ver.di) covers more than 2 million public service workers from national to local level.

Ver.di is Germany's second biggest union, with a membership of about 2.1 million people.

The union was seeking a 6.5% wage rise and permanent jobs for all apprentices. After 40 hours of negotiations, an agreement was reached, which was to be put to ver.di members to ratify between April 11 and 24.

The union agreed to a wage rise of 6.3% over two years with no minimum amount for low income earners. Initially, the employers had offered 3.3% over two years. The agreement will stay in place for 24 months instead of 12 months as demanded by the union.

As part of the agreement, apprentices will need to “prove” themselves for the first post-apprenticeship year before being offered permanent jobs.

Before the talks, the union claims were considered ambitious in light of the loss of real wages (inflation adjusted) and an inflation rate of 2.3% last year.

In Germany, the concept of a “social contract” between unions and bosses has been in place since the post-war years, sometimes referred to as a “union of capital and work”.

During the height of the economic crisis in 2008 and 2009, this partnership resulted in relatively low job losses. However, this came with a cut in real wages.

Also, cheap labour models were introduced and awards were allowed to result in a loss in working conditions and protection. This helped create a division among workers in Germany, where there is no minimum wage.

Unions became part of the push to make Germany a stable production site over other European countries. The rationale of unions following the social contract model was to avoid job losses by protecting German capital.

Data from the International Labour Organisation shows that over the 10 years after 2000, real wages fell by 4.5% while productivity rose.

At the same time, industrial production rose by 20% and company profits by up to 36%.

The ver.di campaign did not raise issues such as outsourcing of jobs or the shrinking of the public sector workforce due to public-private-partnerships.

Over the past 20 years the public sector workforce has shrunk by almost 30%, the proportion of full time workers has almost halved and the proportion of non-permanent staff almost doubled to roughly 9% in 2008.

Despite this, it is likely the outcome of the ver.di negotiations will be considered a success and other unions will aim to replicate a similar outcome.

Initial award discussions have started in the metal and electrical industry, covering 3.6 million workers. IG Metal, Germany's largest trade union with 2.246 million members, is calling for a 6.5% wage rise, more security for apprentices and more say in labour hire arrangements.

Other European countries are watching these industrial campaigns with interest. Any fightback in Germany against low wages and poor working conditions will strengthen campaigns by workers elsewhere on the continent.