Interim report on 2000 collective bargaining round

In July 2000, the WSI research institute presented an interim report on Germany's 2000 collective bargaining round. The study evaluates collective agreements concluded in the first half of 2000, affecting about 57% of all employees covered by an agreement. The average increase in wages and salaries will be around 2.3% in 2000 - significantly lower than the average increase of 3.0% recorded in 1999, but still higher than the 1.8% increase in 1998.

In July 2000, the collective agreement archive of the Institute for Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans-Böckler Foundation published an interim report on the 2000 collective bargaining round ("Tarifpolitischer Halbjahresbericht. Eine Zwischenbilanz der Lohn- und Gehaltsrunde 2000", Reinhard Bispinck/WSI-Tarifarchiv, WSI Informationen zur Tarifpolitik, July 2000). According to the WSI study, the average pay increase in 2000 will be around 2.3%, which is significantly lower than the 3.0% increase recorded in 1999 but still higher than the 1.8% increase in 1998 (see table 1 below). The pay increases vary from sector to sector between 1.9% and 2.9%. While in most sectors, pay increases are significantly lower than in the previous year, there are a few sectors (the food industry, consumption goods industries and private services) which have seen higher pay increases than in 1999. Moreover, in 2000, for the first time, the average increase in east German pay levels (2.0%) will be below the increase in west German levels (2.3%) which is mainly a result of an extensive pay freeze in the east German construction industry.

Assuming a probable rate of inflation of 1%-1.5% and a probable increase in labour productivity of 3% in 2000, pay increases are very moderate and will not exhaust the "cost-neutral margin of distribution" (kostenneutraler Verteilungspielraum) of at least 4%. 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 national income.

* Increases against the previous year; ** figures are calculated on the basis of collective agreements in the first half of 2000 (up to 20 June).

Source: WSI Collective Agreement Archive 2000.

In the first half of 2000, trade unions affiliated to the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) concluded new collective agreements for about 12.5 million employees - around 57% of all German employees covered by a collective agreement. Initially, the unions demanded total increases of between 4% and 5.5% including both pay rises and financial contributions to new arrangements for partial and early retirement (DE0003243N). Since most employers' associations sharply rejected these demands, the majority of the new pay agreements provide for pay rises of between 2% and 3% in 2000 (for details of the new collective agreements, see table 2 annexed to this feature). Moreover, many of the sectoral pay agreements run for two years and determine the pay rises in 2001, which will be between 2% and 2.5% under a majority of the agreements.

Apart from pay rises, the issue of partial retirement has been the most prominent topic in the 2000 collective bargaining round. In many sectors, the bargaining parties have concluded new collective agreements on partial retirement which contain various improvements in the existing regulations, such as:

• the introduction of an individual right for employees to take partial retirement;
• the extension of the possible partial retirement period;
• the introduction of partial retirement for part-time employees or
• the introduction of some financial compensation for employees' losses in statutory pension rights as a result of partial retirement.

In addition, in a few sectors new agreements have been concluded on an extension of supplementary pensions schemes. Finally, many sectoral agreements include new provisions on the promotion of vocational training and determine a certain period of time during which vocational trainees must be taken on at the end of their training. In many agreements, this period has been extended from six to 12 months.

Commentary

The results of the 2000 collective bargaining round should be seen against the background of recent specific developments in German industrial relations. In January 2000, the national "Alliance for Jobs" (Bündnis für Arbeit) adopted a joint statement on an "employment-oriented bargaining policy" (DE0001232F). This is the first time in German history that a national tripartite institution has issued recommendations for a forthcoming bargaining round. The Alliance's joint statement calls for a "longer-term collective bargaining policy" whereby the available "distributive margin" should be based on productivity and should be primarily used for job-creating agreements. In addition, the joint statement calls for job-creating early retirement on acceptable terms for the persons concerned.

Although, in legal terms, the Alliance's recommendations had only a non-binding character, because German collective bargaining is based on the principle of collective bargaining autonomy, they had de facto a strong political influence on the 2000 bargaining round. In the view of employers, the impact of the Alliance on the results of the recent collective bargaining round was very positive, since it applied pressure for a "return to moderate pay increases" after the unions had called for an "end of modesty" in the previous 1999 collective bargaining round (DE9810279F). Furthermore, the employers gave a positive response to the conclusion of "longer-term agreements" with a duration of mostly two years. By contrast, the unions emphasised the positive role of the Alliance in opening the door to new improved agreements on partial retirement, which are seen as an important contribution to promoting employment. At the same time, however, some voices within the unions have made critical remarks, suggesting that an important task of the Alliance has been to discipline the trade unions' pay policy. (Thorsten Schulten, Institute for Economic and Social Research (WSI))

Annex

Source: WSI Collective Agreement Archive 2000.