Interim report on 2001 collective bargaining round
Published: 27 July 2001
In July 2001, the Collective Agreement Archive (WSI-Tarifarchiv) of the Institute for Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans-Böckler Foundation published an interim report on the 2001 collective bargaining round (, Reinhard Bispinck/WSI-Tarifarchiv, WSI Informationen zur Tarifpolitik, Düsseldorf, July 2001 [1]). According to the WSI study, the average pay increase will be around 2.1% in 2000 (calculated on an annual basis), which is even lower than the 2.4% increase in 2000 (DE0102206N [2]) and significantly lower than the 3.0% increase in 1999 - see table 1 below. The pay increases varied from sector to sector, between 1.1% in energy, water, mining and 3.2% in banking and insurance. The average increase in east German pay levels (2.4%) will be slightly higher than the pay increases in west Germany (2.0%). Average collectively agreed pay in east Germany will thus amount to 92.5% of west German pay levels.[1] http://www.boeckler.de/ebib/volltexte/WSI_Mitteilungen-2001-07-407.pdf[2] www.eurofound.europa.eu/ef/observatories/eurwork/articles/collectively-agreed-pay-up-24-in-2000
In July 2001, the WSI research institute presented an interim report on Germany's 2001 collective bargaining round. The study evaluates collective agreements concluded in the first half of 2001, affecting about 17% of all employees covered by an agreement. For the majority of the employees, however, pay increases for 2001 were already determined in 2000 when many agreements were concluded with a term of two years. The average increase in wages and salaries will be around 2.1% in 2001, which is significantly lower than the previous pay increases of 2.4% in 2000 and 3.0% in 1999.
In July 2001, the Collective Agreement Archive (WSI-Tarifarchiv) of the Institute for Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans-Böckler Foundation published an interim report on the 2001 collective bargaining round (, Reinhard Bispinck/WSI-Tarifarchiv, WSI Informationen zur Tarifpolitik, Düsseldorf, July 2001). According to the WSI study, the average pay increase will be around 2.1% in 2000 (calculated on an annual basis), which is even lower than the 2.4% increase in 2000 (DE0102206N) and significantly lower than the 3.0% increase in 1999 - see table 1 below. The pay increases varied from sector to sector, between 1.1% in energy, water, mining and 3.2% in banking and insurance. The average increase in east German pay levels (2.4%) will be slightly higher than the pay increases in west Germany (2.0%). Average collectively agreed pay in east Germany will thus amount to 92.5% of west German pay levels.
| Sector | 2001** | 2000 | 1999 |
|---|---|---|---|
| Banking, insurance | 3.2% | 2.0% | 3.1% |
| Commerce | 2.8% | 3.0% | 3.2% |
| Food industry | 2.7% | 2.8% | 2.7% |
| Consumption goods industry | 2.3% | 2.5% | 2.6% |
| Private services | 2.2% | 2.3% | 2.1% |
| All sectors | 2.1% | 2.4% | 3.0% |
| Trade and transport | 2.0% | 2.3% | 3.0% |
| Investment goods industry | 1.9% | 2.6% | 3.6% |
| Raw material and production industries | 1.9% | 2.5% | 2.4% |
| Horticulture, agriculture, forestry | 1.8% | 2.3% | 2.3% |
| Public services | 1.8% | 1.9% | 3.2% |
| Construction | 1.6% | 1.6% | 2.0% |
| Energy, water, mining | 1.1% | 1.9% | 1.9% |
* Increases against the previous year; ** figures are calculated on the basis of collective agreements in the first half of 2001.
Source: WSI Collective Agreement Archive 2001.
In the first half of 2001, trade unions affiliated to the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) concluded new collective agreements for about 3.7 million employees, which affected only 17% of all employees covered by a collective agreement. The most important sectoral pay agreements were concluded in banking and insurance (DE0106228N) and the retail trade (DE0107232N). The average agreed rate of pay increases was 2.7%, varying between 2.8% in banking and insurance and around 2% in automotive trade and the agriculture sector - see table 2 below.
| Date of agreement | Branch (region) | Pay increase | Duration of pay agreement |
|---|---|---|---|
| 15 February 2001 | Building cleaning services (North-Rhine Westphalia) | 2.3% from May 2001 | 12 months |
| 26 March 2001 | Automobile trade (North-Rhine Westphalia) | 1.95% from April 2001 | 11 months |
| 10 April 2001 | Hotels and restaurants (Saxony) | Flat-rate payment of DEM 120 for January-April 2001; 2.5% from May 2001 | 12 months |
| 7 May 2001 | Confectionery industries | 2.5% from April 2001 | 12 months |
| 21/22 May 2001 | Banking | Flat-rate payment of DEM 280 for April 2001; 2.8% from May 2001 | 12 months |
| 28/29 May 2001 | Insurance | Flat-rate payment of DEM 200 for May 2001; 2.8% from June 2001 | 12 months |
| 13 June 2001 | Agriculture (Bavaria) | Flat-rate payment of DEM 450 for November 2000 to June 2001; 2.0% from July 2001 | 18 months |
| 26 June 2001 | Retail trade | 2.7% from April 2001 | 12 months |
Source: WSI Collective Agreement Archive 2001.
For the majority of the employees, pay increases for 2001 were already determined in the 2000 collective bargaining round (DE0012202F) when many sectoral pay agreements were concluded with a term of two years. The average agreed rate of pay increases for 2001 in the agreements signed in 2000 was somewhat below the rate of the new agreements signed in 2001. Most of the earlier agreements provided for pay increases between 2% and 2.5% - see table 3 below.
| Introduction of pay increase | Branches (region) | Pay increases | Duration of pay agreement |
|---|---|---|---|
| April 2001 | Construction (east Germany) | 1.4% | Until March 2002 |
| April 2001 | Construction (west Germany) | 1.6% | Until March 2002 |
| April 2001 | Wholesale trade (North-Rhine Westphalia) | 2.8% | Until March 2002 |
| May 2001 | Deutsche Post AG | 2.3% | Until April 2002 |
| May 2001 | Metalworking industry | 2.1% | Until February 2002 |
| June 2001 | Printing industry | 2.5% | Until March 2002 |
| June 2001 | Chemical industry (west Germany) | 2.0% | Until February 2002 |
| July 2001 | Chemical industry (east Germany) | 2.8% | Until April 2002 |
| August 2001 | Private transport | 2.0% | Until July 2002 |
| September 2001 | Public services | 2.4% | Until October 2002 |
| September 2001 | Textile and clothing industry | 2.4% | Until September 2002 |
| October 2001 | Iron and steel industry | 2.2% | Until May 2002 |
Source: WSI Collective Agreement Archive 2001.
Since the average increase in inflation was 2.8% in the first half of 2001, many sectoral pay agreements will lead to a decrease in real wages. Assuming a probable increase in labour productivity of about 1% and a probable rate of inflation of 2.5%, pay increases in 2001 are extremely moderate and will not be able to exhaust the "cost-neutral margin of distribution" (kostenneutraler Verteilungspielraum) of at least 3.5%. As a result, there will be a further redistribution from labour to capital income and a further decline of the "wage share" - ie the share of labour income in the national income.
One notable exception to the overall pay moderation was the recent pay agreement for the pilots at the German airline Lufthansa (DE0106226F). The German Airlines Pilots' Association (Vereinigung Cockpit, VC) – which is not an affiliate of DGB – originally called for pay increases of up to 35% and justified its pay claims with international wage comparisons, according to which the pilots of most other airlines earn much more than the pilots at Lufthansa. According to VC's figures, the final agreement, which was reached within an arbitration committee after a number of 24-hour strikes by pilots, includes a 26% increase in basic pay and an additional 33.2% increase in variable pay for a term of three years.
As far as non-pay issues are concerned, various new provisions have been concluded in 2001 in the field of early and partial retirement. Furthermore, in metalworking the collective bargaining parties in the district of Baden Württemberg have concluded a new collective agreement on further and continuing training which entitles employees to have regular consultations with their employers to determine their needs for future training (DE0107233N). In construction, the bargaining parties have signed the first sectoral agreement on private pensions (DE0104216N), anticipating the current changes in the German pensions system (DE0106227N).
Commentary
Recent collective bargaining in Germany was very much influenced by the tripartite national "Alliance for Jobs" (Bündnis für Arbeit) which in January 2000 called for an "employment-oriented" and "longer-term collective bargaining policy" (DE0001232F). As a result most of the collective agreements signed in 2000 run for two years and provide for extremely moderate pay increases. Therefore, in 2001 there has been only a very small-scale bargaining round, with the margin for the agreements more or less prescribed.
Given an average pay increase of 2.1%, in 2001 many employees will be faced with a loss in real wages. At the same time, however, the promise of new jobs as a result of moderate pay developments once again seems to be unfulfilled, since Germany's performance in creating new jobs is still one of the worst in Europe. As the equation "moderate pay = new jobs" does not appear to be working, the next collective bargaining round in 2002 might be much more controversial.
Within the macroeconomic framework of EU Economic and Monetary Union, the results of German collective bargaining also have an important impact for other European countries. A recent WSI European collective bargaining report found that, in 2001, Germany is expected to have the most restricted pay developments in the whole European Union (, Thorsten Schulten, in WSI-MitteilungenNo. 7/2001). Against this background, it is notable that earlier in 2001 the president of the new Unified Service Sector Union (Vereinigte Dienstleistungsgewerkschaft, ver.di), Frank Bsirske, supported a resolution which stated that "the pay restraint policy in Germany in 2000 and 2001 undermines the approach of the ""Doorn initiative"", whereby unions from Belgium, Germany, Luxembourg and the Netherlands are seeking to develop European trade union coordination of collective bargaining (DE0009281F). Thereby, Germany is initiating downward competition over pay in Europe, which has negative effects for employment in the whole European single market". (Thorsten Schulten, Institute for Economic and Social Research, WSI)
Eurofound recommends citing this publication in the following way.
Eurofound (2001), Interim report on 2001 collective bargaining round, article.
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