Majority of managers doubt usefulness of Alliance for Jobs

In February 2000, a survey conducted by the business newspaper Handelsblatt indicated that three out of five German managers saw no sense in continuing the national tripartite Alliance for Jobs, after the trade unions had announced their claims for the 2000 collective bargaining round. Although the majority of the managers questioned have negative assumptions about the outcome of the forthcoming bargaining round, they clearly see the development of overall economic framework conditions in a positive light and expect an overall growth in investments and employment in the coming months.

A majority of German managers consider the continuation of the current Alliance for Jobs (Bündnis für Arbeit) - the national-level permanent tripartite structure set up in December 1998 with the aim of promoting employment (DE9812286N) - as not being useful, following the announcement by several trade unions of their demands for the forthcoming 2000 bargaining round (DE0001232F). This was the main finding of a recent survey conducted on behalf of Germany's leading business newspaper, Handelsblatt. The "Handelsblatt Business-Monitor" was based on a survey of 805 managers in the period between 24 January and 8 February 2000. The survey covers managers from different branches and different sizes of companies and claims to be representative of the views of German business leaders.

Managers' attitude towards Alliance for Jobs

Asked whether or not it would make sense to continue the Alliance for Jobs against the background of the union's recent bargaining claims, only 40% of the managers surveyed were in favour of continuing the Alliance while about 58% called for a termination of Germany's national social pact - see table 1 below. The strongest rejection of the Alliance came from managers in the construction industry and in "other manufacturing," where only 32% called for its continuation. The highest support for the Alliance, about 50%, came from managers in mining, energy and chemicals.

Furthermore, the scepticism towards the Alliance was most widespread among small and medium-sized companies: 62% of the managers of companies with less than 500 employees doubted the usefulness of the Alliance, while the corresponding figure for managers from larger companies was 48%.

Table 1. Attitude of German managers towards Alliance for Jobs (in February 2000)
Sector % of managers in favour of continuing top-level talks within Alliance for Jobs*
Total 40%
Services 42%
Transport and commerce 38%
Construction 32%
Mining, energy, chemicals 50%
Metalworking 41%
Other manufacturing 32%

*The question was: "Regarding recent trade union bargaining demands, do you consider a continuation of top-level talks within the Alliance for Jobs as useful or do you think that they are no longer meaningful?"

Source: Handelsblatt Business-Monitor February 2000, Handelsblatt, 11/12 February 2000.

Managers' assumptions on results of 2000 bargaining round

In comments on the results of the recent Handelsblatt Business-Monitor, representatives of employers' associations accused the trade unions of being responsible for the strong scepticism displayed by managers towards the Alliance for Jobs. In January 2000, several unions set out their bargaining claims for the current bargaining round. After the IG Metall metalworkers union issued a demand for a 5.5% pay increase, many other sectoral trade unions followed with claims for increases between 4% and 5.5%. According to the employers' associations, these claims contradict the recent statement of the Alliance for Jobs on employment-oriented bargaining policy, which recommends pay increases based on productivity growth (DE0001232F).

The recent Handelsblatt survey ascertained that there is strong pessimism among managers on the assumed outcome of the 2000 collective bargaining round - see table 2. About 39% of the managers surveyed expected pay increases of at least 3%. According to a previous survey, in November 1999 only 11% of the managers expected such high pay increases. The largest group of managers surveyed, at 43%, are currently counting on pay increases between 2.5% and 3%. While in November 1999, a majority of the managers (60%) assumed pay increases of a maximum of 2.5%, there are currently only 17% who still expect such low pay increases.

Table 2. Managers' assumptions on possible pay increases in 2000 collective bargaining round, surveyed in November 1999 and February 2000
Expected pay increase November 1999 February 2000
Compensation for inflation (approx. 1.2%) 6% 1%
Up to 2% 21% 4%
Between 2.0% and 2.5% 33% 12%
Between 2.5% and 3.0% 27% 43%
Between 3.0% and 3.5% 10% 32%
More than 4.0% 1% 7%

Source: Handelsblatt Business-Monitor February 2000, Handelsblatt, 11/12 February 2000.

Furthermore, the Handelsblatt survey revealed a change in the managers' attitudes towards the introduction of new early retirement schemes, which for some unions have a high priority in the current bargaining round (DE9910217F). In November 1999, there were still about 83% of the managers surveyed who were strictly against the introduction of a new early retirement scheme at 60, even if this would lead to lower wage increases. By contrast, in February 2000, 60% of the managers surveyed were ready to accept a new early retirement scheme in exchange for wage restraint. The supporters of a new early retirement scheme, however, came mainly from large-scale companies.

Managers' expectations regarding investments and employment

Despite the pessimistic assumptions regarding the outcome of the next bargaining round, there are much more positive expectations regarding the development of overall business conditions in Germany. About 41% of the managers surveyed are counting on an improvement of the economic framework conditions while only 13% assume a change for the worse. In November 1999, there were only 23% who believed in an improvement and 31% who believed in a deterioration. The reversal in managers' attitudes might be explained by more positive forecasts on economic developments as well as by the tax reform announced by the federal government, which will significantly reduce the tax burden for companies.

As a result of a more positive attitude regarding the overall economic framework conditions, there is also an increased number of managers who expect growth in both investments and employment - see table 3 below. Of the managers surveyed, 31% estimated that the number of employees will increase in the next 12 month while about 21% thought that it will decrease. According to the Handelsblatt Business-Monitor, this has been, on balance, the best employment performance of a managers' survey for along time.

Table 3. Managers' assumptions on development of investments and employment in next 12 months, surveyed in December 1999 and February 2000
Managers' assumptions Investments Employment
. February 2000 December 1999 February 2000 December 1999
Increase 36% 38% 31% 30%
Constant 51% 43% 48% 44%
Decrease 13% 19% 21% 26%

Source: Handelsblatt Business-Monitor February 2000, Handelsblatt, 11/12 February 2000.


For three out of five German managers it makes no sense, at present, to continue with the national Alliance for Jobs. This was the most remarkable outcome of the recent Handelsblatt Business-Monitor survey. The figures might be a little exaggerated, as the start of the current bargaining round has whipped up emotions. Nevertheless, there seems to be a significant part of Germany's business leadership who have a deep scepticism about "corporatist" approaches and more or less openly reject the employers' participation in a national social pact.

According to the employers' associations, the main reason for the "bad image" of the Alliance for Jobs among German managers lies in the trade unions' collective bargaining policy. The negative expectations of managers regarding the outcome of the current bargaining round seem to be proof of that argument. Consequently, the employers' associations see the prime task of the Alliance as guaranteeing a policy of pay moderation.

In contrast to their negative viewpoint on the Alliance and on collective bargaining policy, the Handelsblatt survey indicates that managers have a more positive attitude towards the development of the overall economic framework conditions. On balance they expect a new growth in investments, and in employment as well. How can this contradiction be explained? First of all, it shows that labour costs are only one of the factors which determine companies' economic performance – and their significance is even declining. Moreover, there seems to be a "hidden realism" among managers that in recent years pay developments in Germany have not been "too high" but on the contrary have lagged behind overall economic developments (DE0002239N). (Thorsten Schulten, Institute for Economic and Social Research, WSI)

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