New developments within national Alliance for Jobs

In July 1999, the third round of top-level talks between leading representatives of the government, trade unions and employers' associations took place within the framework of Germany's "Alliance for Jobs". All parties adopted a joint statement which defines common views on topics such as tax policy, vocational training, collective bargaining policy and partial and early retirement. In addition, the social partners' peak organisations, DGB and BDA, presented a joint declaration setting out a number of principles for the future development of collective bargaining. The reactions to the Alliance's new documents among trade unions and employers' associations, however, showed that on some points the two sides still have significantly differing points of view.

On 6 July 1999, leading representatives of the federal government, trade unions and employers' associations (see the annex at the end of this record for details of the participants) met officially, chaired by the Federal Chancellor, Gerhard Schröder, for the third round of top-level talks within the framework of the Alliance for Jobs, Training and Competitiveness (Bündnis für Arbeit, Ausbildung und Wettbewerbsfähigkeit). The Alliance was established in December 1998 as a new permanent tripartite arrangement at national level, including various working groups on specific topics as well as regular top-level talks between the leading representatives of all three parties (DE9812286N).

At the July meeting, a joint statement was adopted, in which the government, unions and employers' associations agree on various common principles in the fields of vocational training, corporate tax reforms, wage and working time policy and early retirement. In addition, the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) and the Confederation of German Employers' Associations (Bundesvereinigung der deutschen Arbeitgeberverbände, BDA) presented a joint declaration as a contribution to the Alliance, which contains common viewpoints on various principles for future collective bargaining policy.

BDA/DGB joint declaration

In their joint declaration, DGB and BDA agree on the goal of a "substantial and sustainable reduction of unemployment". Since there is "no panacea" for the creation of new employment, various initiatives are necessary including "structural reforms in the fields of collective bargaining, social and tax policy as well as new innovations and investments and an improvement of vocational and continued training". In order to create a "new political and social consensus" on these initiatives, DGB and BDA want "to give a new impetus to the Alliance for jobs".

Regarding collective bargaining policy, DGB and BDA have agreed on the following goals:

  • a "collective bargaining policy which is reliable in the medium and long term", and which gives companies a stable basis for the planning of their business;
  • "a differentiated and flexible working time policy and a different distribution of work", including
    • "an employment-creating reduction of overtime",
    • the use of working time "corridors" and annualised working time arrangements as well as yearly and/or life-long working time accounts,
    • the creation of more part-time work and the development of new models to make such work more attractive,
    • an improved utilisation of partial retirement;
  • the improvement of company-related pension schemes;
  • the priority use of "increases in productivity for employment promotion";
  • the promotion of performance-related payments;
  • a continuation of the reform of branch-level collective bargaining system, with an extension of "opening clauses" and collectively agreed "corridors" in order to allow more company-related rules.

Joint statement on the meeting's results

Against the background of the DGB/BDA joint declaration, the government, trade unions and employers' associations were able to reach common viewpoints on an even broader political agenda, expressed in a joint statement on the results of the Alliance's third top-level meeting. This document covers mainly the fields of financial and tax policy, vocational training, collective bargaining policy and partial and early retirement, as well as a special programme called "Recovery East" to improve the employment situation in eastern Germany.

Financial and tax policy

According to the joint statement, all parties to the Alliance consider "necessary and important" a "a strong policy of financial consolidation aimed at promoting growth and employment and ensuring a socially just distribution of burdens caused by required cost-cutting measures". In addition, the parties "welcome the direction shown by the German government's plan for corporate tax reform, ie that of lowering the level of corporate tax rates for companies in Germany, in particular for small and medium-sized enterprises".

Vocational training

All parties agree on the principal aim that "every young person who is willing and able will be trained." In order to reach this goal, the Alliance parties agreed on the adoption of an extra document on a "consensus on career training" (Ausbildungskonsens), which has been annexed to the joint statement. This "stipulates that applicants registered at labour offices as not having been placed for career training as of 30 September will be offered a training opportunity in the field of their choice at a location as close to home as possible under regional circumstances". Furthermore, with the aim of a substantial improvement of the vocational training situation Germany, the following initiatives have been agreed:

  • "from 1999 onward, regional conferences on career training will be held every year in October, involving representatives of the employment administration, management, labour, and other responsible parties in the region at the level of local and state employment offices";
  • "the industrial associations reaffirmed the commitment they made in February to cover demographically based additional demand for in-service career training opportunities in 1999 and to create at least 10,000 additional career training places above and beyond this. For the following years they want to at least cover annual additional demand based on population growth";
  • the parties to the Alliance see, in particular, a considerable need for the training of additional skilled personnel in information and communications technologies and aims to increase "the volume of career training in new information technology professions to 40,000 over a period of three years";
  • all parties support the guidelines and implementation steps approved by the Alliance's working group on basic and supplementary career training for young people from low-income families and/or with low qualification levels, as "an important contribution to the prevention of future unemployment";
  • the federal employment administration will increase its career training offers in the professions covered by the dual system of vocational training (DE9704107F) by more than 6% in 1999 and will at least keep up with demographically-based increases in demand in the years that follow; and
  • "every year in March, regional career-training conferences will be held to take stock of career-training opportunities in the preceding year, to agree on the career-training demand forecast for the current year, as well as to agree on measures to satisfy the demand for career training."

Collective bargaining policy

The alliance parties note "with approval" the joint DGB/BDA declaration and welcome the fact that "DGB and BDA have agreed on common foundations for the Alliance for Jobs, Training and Competitiveness".

Partial and early retirement

The parties to the Alliance agree on greater utilisation of partial retirement (DE9708224F) and its extension to part-time workers. Furthermore the framework conditions for companies to receive subsidies while providing partial retirement for employees will be eased and extended. Finally, the various proposals for new regulations on early retirement which have been made by all parties will be further discussed within the Alliance's working groups on "Pension reform and unemployment insurance" and on "Length of working life/early retirement".

Recovery East

The Alliance parties "share the view that the Recovery East economic development programme for eastern Germany will continue to require considerable effort". Therefore, " it will be absolutely necessary to pursue an active employment policy maintaining a high level of involvement." Reports regarding experience accumulated and progress made in connection with agreed measures aimed at promoting interregional sales of eastern German products and services should be given at a joint conference to be held in the spring of 2000.

Future topics

The Alliance's joint statement ends by identifying future topics for further top-level talks. The parties ask the Alliance's special working group on "Benchmarking", which is composed of four researchers including the heads of the employer-related Institut der deutschen Wirtschaft and the trade union-related Wirtschafts- und Sozialwissenschaftliches Institut, to prepare information and data on the following topics:

  • options for improving employment opportunities for people with low levels of qualification;
  • a European comparison of working time arrangements; and
  • an international comparison of employment policy strategies.

The next top-level meeting of the Alliance is to be held in Berlin in autumn 1999.

Reactions after the third round of talks

Before the third top-level meeting in July 1999, public opinion in Germany was very much dominated by more sceptical views which questioned the Alliance's capability to conclude joint agreements which genuinely promote the creation of employment. Against this background, almost all parties have given relatively positive reactions to the recent outcomes of the Alliance. For example, Chancellor Gerhard Schröder has expressed his satisfaction with the joint statement by calling it a "breakthrough" in the work of the Alliance. Representatives from both the employers' and the trade union side have underlined that, for the first time, the Alliance has been able to achieve some concrete results. Judging from the social partners' statements, however, they are emphasising different aspects of the agreements.

Reactions from the employers

From the employers' perspective, the most important aspect seems to be that, with the joint DGB/BDA declaration, the trade unions appear to be ready to accept that collective bargaining policy should become a normal part of the Alliance for jobs. Regarding wage policy in particular, the unions have always rejected demands from the employers' side for laying down at least a general orientation for wage developments within the Alliance (DE9811281F). For the employers, the new agreement has breached that taboo.

Since the DGB/BDA declaration calls for a "collective bargaining policy which is reliable in the medium and long term" and a "priority use of increases in productivity for employment promotion", the employers interpret these statements very much as an agreement to return to a policy of wage restraint. The president of the German Metalworking Employers' Association (Gesamtmetall), Werner Stumpfe, has already expressed his hopes that the Alliance will have "a positive influence on the next bargaining rounds". He further proposed that in the future the Alliance should agree on a common set of macroeconomic data (for example, developments in prices and productivity) which should define a common framework for collective bargaining and thereby also implicitly suggest a certain margin for wage increases.

Reaction from trade unions

Trade unions' reactions have focused on two topics in particular. The first is the so-called "consensus on career training", which tries to give every job-seeker the guarantee of receiving vocational training. The second is the employers' agreement within the DGB/BDA declaration to "a different distribution of work" and, in particular, "an employment-creating reduction of overtime". In the latter area, the IG Metall metalworkers' union has already taken the initiative and demanded that Gesamtmetall conclude a new framework collective agreement providing that, from the first hour, all overtime should be compensated by additional free time (currently the first 16 hours of overtime within a month can be compensated with money). For the unions, the issue of overtime reduction will be a first test of whether the Alliance's statements will really have a practical impact.

Regarding wage policy, the unions have no united strategy, though most are still rejecting the conclusion of wage guidelines or "wage corridors" within the framework of the Alliance. According to IG Metall, the statement in the DGB/BDA declaration about making a "priority use of increases in productivity for employment promotion" should not be interpreted as the unions' acceptance of a policy of wage restraint. However, the president of IG Metall, Klaus Zwickel, said that the metalworkers' union was ready to talk about using productivity growth for further working time reductions instead of wage increases.

Commentary

Following the third round of top-level talks, the national Alliance for Jobs, for the first time, produced some concrete results, particularly, in the fields of vocational training and, more controversially, collective bargaining. After a period of apparent stagnation, the Alliance seems to be working and the first reactions from the parties involved as well as of the German public have been positive and optimistic.

However, most of the issues agreed on, such as the vocational training guarantee, the reduction of overtime and a better utilisation of partial retirement, are "declarations of intent" which now have to be put into practice. Although the parties have now agreed that collective bargaining policy and, in particular, wage policy should at least be discussed within the Alliance, the different reactions of the collective bargaining parties to this point has also made clear that the Alliance is probably the right place neither to solve the conflict on income distribution, nor to adapt the differing conceptions of the relation between pay and employment. (Thorsten Schulten, Institute for Economic and Social Research (WSI))

Annex: Participants in the third round of top-level talks within the Alliance for Jobs in July 1999
Government Trade unions Employers' and business associations
Gerhard Schröder, Chancellor Dieter Schulte, German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) Dieter Hundt, Confederation of German Employers' Associations (Bundesvereinigung der deutschen Arbeitgeberverbände, BDA)
Hans Eichel, Minister of Finance Klaus Zwickel, German Metalworker's Union (IG Metall) Hans-Olaf Henkel, Confederation of German Industries (Bundesvereinigung der deutschen Industrie, BDI)
Werner Müller, Minister of Economics Hubertus Schmoldt, Mining, Chemicals and Energy Union (Union (Industriegewerkschaft Bergbau, Chemie, Energie, IG BCE) Hans Peter Stihl, German Association of Chambers of Commerce (Deutscher Industrie- und Handelstag, DIHT)
Walter Riester, Minister of Labour Herbert Mai, Public Services, Transport and Traffic Union (Gewerkschaft Öffentliche Dienste, Transport und Verkeh r, ÖTV) Dieter Philipp, Central Association of German Crafts (Zentralverband des Deutschen Handwerks, ZDH)
Andrea Fischer, Minister of Health Roland Issen, German White-Collar Workers Union (Deutsche Angestellten-Gewerkschaft, DAG) .
Edelgard Bulmann, Minister for Education and Research . .
Frank-Walter Steinmeier, Minister for the Chancellor . .

Source: Press and Information Service of the German federal government.

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