2007 collective bargaining round examined
In January 2008, the Institute for Economic and Social Research presented its annual report on Germany’s 2007 collective bargaining round. The study evaluates collective agreements concluded in 2007, affecting some 9.1 million employees. The average increase in collectively agreed wages and salaries was 2.2% in 2007, which was above the 1.5% increase of the previous year. According to the Federal Statistical Office, actual gross wages and salaries only rose by 1.3% in 2007.
In January 2008, the Collective Agreement Archive (WSI-Tarifarchiv) of the Institute for Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans Böckler Foundation (Hans Böckler Stiftung) published its annual report on collective bargaining in 2007 (in German). The study evaluates collective agreements concluded in 2007, affecting some 9.1 million employees, representing about 47% of all those covered by a collective agreement. A further three million employees received pay increases in 2007 which had already been agreed in previous years.
In 2007, the trade unions had initially called for pay increases of between 4% and 7%.
Collectively agreed pay increases
According to the WSI report, the average collectively agreed increase in wages and salaries was 2.2% in 2007, which was above the 1.5% increase of 2006 (DE0702039I). Table 1 outlines annual increases in collectively agreed pay from 2003 to 2007. Pay increases varied from sector to sector, between 0.6% in the public services and social security sectors, and 3.4% in the investment goods sector. There was no difference in the average increase of eastern German and western German pay levels.
| Sector | 2007 | 2006 | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|
| Construction | 2.0 | 0.7 | 0.5 | 2.4 | 3.0 |
| Food industry | 2.2 | 1.6 | 1.8 | 1.9 | 2.7 |
| Transport and communication | 2.2 | 2.0 | 1.9 | 2.2 | 2.6 |
| Raw material and production industries | 2.6 | 2.7 | 2.0 | 2.1 | 2.5 |
| Agriculture, forestry and horticulture | 1.7 | 1.2 | 0.8 | 1.7 | 2.5 |
| Investment goods industry | 3.4 | 2.4 | 1.8 | 2.3 | 2.4 |
| Consumer goods industry | 2.5 | 1.5 | 1.5 | 2.1 | 2.3 |
| Commerce | 2.0 | 0.9 | 1.7 | 1.8 | 2.2 |
| Energy, water and mining | 2.0 | 1.8 | 1.8 | 1.7 | 2.2 |
| Private services, non-profit sector | 1.4 | 0.8 | 1.6 | 1.9 | 2.2 |
| Financial services | 1.8 | 2.1 | 1.7 | 2.4 | 2.1 |
| Public services and social security | 0.6 | 0.5 | 0.9 | 1.8 | 3.0 |
| All sectors | 2.2 | 1.5 | 1.6 | 2.0 | 2.5 |
Note: * Increases compared with previous year.
Source: WSI, Collective Agreement Archive, 2008
According to the Federal Statistical Office (Statistisches Bundesamt, Destatis), actual gross wages and salaries rose by 1.3% in 2007, compared with 0.7% in 2006.
The average duration period of collective agreements on pay signed in 2007 was 22.2 months (22.1 months in 2006). In eastern Germany, the duration of collective agreements tended to be longer in the past than in the bargaining areas in western Germany; this pattern was revised in 2007 (Table 2).
| 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | |
|---|---|---|---|---|---|---|---|---|---|
| Western Germany | 13.8 | 21.5 | 14.1 | 18.1 | 20.4 | 21.8 | 25.2 | 21.6 | 22.2 |
| Eastern Germany | 14.7 | 23.3 | 16.4 | 19.7 | 21.0 | 22.0 | 28.4 | 24.7 | 21.9 |
Source: WSI, Collective Bargaining Archive, 2008
Many collective agreements contained so-called zero months, in other words, months within the period of the collective agreements in which the agreed pay increase was delayed (Table 3).
| Date | Sector | Provisions |
|---|---|---|
| 8 March 2007 | Chemicals industry (DE0703039I) | €70 one-off payments for the first month; 3.6% increase for 13 months with effect from February, March or April 2007, depending on the bargaining region; additional one-off payment of 13 times 0.7% of monthly income to be paid by 30 June 2007 latest |
| 27 March 2007 | Textiles industry, eastern Germany | Two zero months in April and May 2007; 3% increase on 1 June 2007 and 2.7% increase on 1 July 2008; valid until 31 March 2009 |
| 4 May 2007 | Metalworking industry, Baden-Württemberg, Pilot agreement (DE0706019I) | €400 one-off payment in April and May 2007; 4.1% increase on 1 June 2007; 1.7% increase with effect from 1 June 2008; additional one-off payment of 0.7% of monthly income for the period June 2008 to October 2008; valid until 31 October 2008 |
| 11 May 2007 | Sweets and confectionary industry; Baden-Württemberg | 2.4% increase on 1 July 2007; 2.3% increase on 1 July 2008; valid until 30 June 2009 |
| 19 May 2007 | Construction industry (DE0709019I) | Two zero months in April and May 2007; 3.1% increase on 1 June 2007, followed by 1.5% increase on 1 April 2008 and 1.6% increase on 1 September 2008; additional payments of 0.4% of monthly income for each month from 1 June 2007 until March 2008 and 0.5% of monthly income for each month from 1 April 2008 until March 2009; valid until 31 March 2009 |
| 24 May 2007 | Hotels and restaurants,Bavaria | Two zero months in April and May 2007; 2.2% increase with effect from 1 June 2007 |
| 6 June 2007 | Printing industry | Three zero months in April, May and June 2007; 3% increase on 1 July 2007 and 2.1% increase on 1 July 2008; valid until 31 March 2009 |
| 20 June 2007 | Deutsche Bahn AG (German Rail) | €600 one-off payment for the period July 2007 to December 2007; 4.5% increase on 1 January 2008; valid until 31 December 2008 |
| 9 July 2007 | Wholesale trade, Bavaria | Three zero months in April, May and June 2007; monthly pay increases of 2.4% and €15.50 with effect from 1 July 2007, followed by 2% and €7.50 on 1 June 2008; valid until 31 March 2009 |
| 24 November 2007 | Insurance sector | €300 one-off payment for the period September 2007 to December 2007; 3% increase on 31 January 2008; 1.6% increase on 1 January 2009; one-off payment of 3.6% of monthly income on 1 July 2008; valid until 30 September 2009 |
Source: WSI, Collective Bargaining Archive, 2008
Disputes and tough bargaining rounds
The 2007 collective bargaining round was marked by a number of strike actions. The most widespread strike actions took place in the retail trade sector where negotiations failed in the spring of 2007. Despite repeated strike actions in several regional bargaining areas, no agreement could be reached in the retail sector, so that the bargaining round will continue in 2008. The dispute is complicated due to the employers’ demand to accompany any wage increases by substantial cuts in bonuses for non-standard working hours, notably working at unsocial hours in the evening or at weekends. Employers consider these bonuses no longer appropriate since shop closing hours were deregulated in 2006 (DE0612019I). The United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di), on the other hand, insists on maintaining such pay bonuses for unsocial working hours.
On 20 June 2007, following six weeks of strike action, ver.di and the German telecommunications company Deutsche Telekom AG agreed on a package of collective agreements which regulate pay and conditions for some 50,000 Deutsche Telekom employees (DE0707019I). These workers are to be transferred to three new service companies under the umbrella name T-Service with effect from 1 July 2007. Key points of the agreement include the extension of weekly working hours from 34 to 38 hours without pay compensation and a reduction of wage levels by 6.5% stretched over a period of 42 months. In exchange for these concessions, the company agreed that there would be no compulsory redundancies until the end of 2012.
The 2007 bargaining round in the construction sector lasted more than six months as reaching a sectoral collective agreement proved challenging. The employer organisations had difficulties in finding a consensus among their affiliates. Following a joint dispute resolution procedure, a compromise was found in May 2007; however, this failed to win the overall support of employers in the sector when two regional affiliates of the Central Association of the German Building Industry (Zentralverband des Deutschen Baugewerbes, ZDB), representing small enterprises in the northern states of Lower Saxony and Schleswig-Holstein, refused to accept the outcome. In response, the Trade Union for Building, Forestry, Agriculture and the Environment (Industriegewerkschaft Bauen-Agrar-Umwelt, IG BAU) took official strike action in these bargaining regions. The strikes lasted 19 days and involved about 2,000 construction workers at 300 building sites. A further compromise in July 2007 resolved the dispute in the two regions concerned and, following final negotiations, the bargaining round was concluded on 20 August 2007 (DE0709019I).
A major industrial dispute in 2007 involved the German rail company Deutsche Bahn AG (DB) and the German Engine Drivers’ Union (Gewerkschaft Deutscher Lokomotivführer, GDL). GDL refused to accept a new collective agreement signed in July 2007 between DB and the two other trade unions representing German rail workers – Transnet, affiliated to the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) which is by far the biggest trade union in the company, and the Transport Trade Union GDBA (Verkehrsgewerkschaft GDBA) which is – as GDL – affiliated to the German Federation of Career Public Servants (Deutscher Beamtenbund, dbb). GDL demanded to conclude a separate collective agreement for train drivers and conductors and entered into official strike action when the company denied any negotiations on such an agreement. Despite a mediation process, the dispute remained unsolved in 2007. At the end of the year, the government intervened and, in January 2008, GDL and DB signed a general collective agreement to settle the dispute.
Gender pay gap
Although a considerable gap in average earnings between men and women continues to exist in Germany (DE0604019I), special provisions to tackle wage discrimination and to promote equal opportunities were not included in the collective agreements concluded in 2007.
Heiner Dribbusch, Institute of Economic and Social Research, WSI