Collectively agreed pay up 2.4% in 2000

According to figures from the WSI Collective Agreement Archive, issued in early 2001, collectively agreed pay increased on average by about 2.4% in Germany in 2000. Sectoral pay increases ranged between 3.0% and 1.6%.

According to the WSI Collective Agreement Archive's recently published annual report on the 2000 collective bargaining round in Germany, trade unions affiliated to the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) concluded new collective pay agreements for some 18.4 million employees during the year. 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). After the employers' associations sharply rejected these demands, the majority of the new pay agreements provided for pay rises of between 2% and 3% in 2000 - see table 1 below for details. 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 the majority of the agreements.

Table 1. Selected pay agreements in 2000 bargaining round
Date of agreement Branches (region) Pay increases Duration of pay agreements
25 January 2000 Banking (DE0002236N; DE0003244N) Flat-rate payment of DEM 4,000; 1.5% from April 2000; 1.5% from August 2000. 12 months.
22 March 2000 Chemicals industry (west Germany) (DE0004255F) 2.2% from June 2000; 2.0% from June 2001. 21 months.
27 March 2000 Hotels and restaurants (Bavaria) 2.5% from April 2000. 12 months.
28 March 2000 Metalworking (North Rhine Westphalia) (DE0004255F) Flat-rate payment of DEM 330 for March/April 2000; 3.0% from May 2000; 2.1% from May 2001. 24 months.
30 March 2000 Construction industry (west Germany) (DE0005259N) 2.0% from April 2000; 1.6% from April 2001. 24 months.
1 April 2000 Chemicals industry (east Germany 2.8% from July 2000; 2.8% from July 2001. 21 months.
11 April 2000 Metalworking (east Germany) Flat-rate payment of DEM 330 for March/April 2000; 3.0% from May 2000; 2.1% from May 2001. 24 months.
4 May 2000 Insurance (DE0005258N) Flat-rate payment of DEM 200; 2.5% from May 2000. 13 months.
11 May 2000 Printing industry (west Germany) (DE0006266N) 3.0% from April 2000; 2.5% pay increase from June 2001. 24 months.
16 May 2000 Printing industry (east Germany) April to June 2000 - "zero months" without pay increase; 3.0% from July 2000; 2.5% from June 2001. 24 months.
18/19 May 2000 Construction industry (east Germany) April 2000 to March 2001 - "zero months" without pay increase; 2% increase in minimum wage from September 2000; 1.4% from April 2001; 1.6% increase in minimum wage from September 2001. 24 months.
19 May 2000 Confectionery (North Rhine-Westphalia) Flat-rate payment of DEM 40; 2.8% from May 2000. 12 months.
25 May 2000 Wholesale trade (North Rhine-Westphalia) 2.5% from April 2000; 2.8% from April 2001. 24 months.
1 June 2000 Deutsche Post AG 2.3% from April 2000; 2.3% from May 2001. 25 months.
13 June 2000 Public services (DE0006268F) Flat-rate payment of DEM 400 for April-July 2000; 2.0% from August 2001; 2.4% from September 2001; adjustment of east German payments to west German pay levels - 86.5% to 87% from August 2000, 87% to 88.5% from January 2001, 88.5% to 90% from January 2002. 31 months (pay agreement); 33 months (adjustment agreement).
20 June 2000 Iron and steel industry Flat-rate payment of DEM 1,000 for June/July 2000; 3.3% from August 2001; 2.2% from October 2001. 24 months.
28 June 2000 Mining June 2000 - "zero month" without pay increase; flat-rate payment of DEM 50 for July 2000; 2.0% from August 2000. 14 months.
27 June 2000 Retail trade (North Rhine-Westphalia) (DE0008275N) April 2000 - "zero month" without pay increase; 2.5% from May 2000. 12 months
23 September 2000 Textiles and clothing industry (DE0010284N) 2.4% from September 2000; 2.4% from September 2001. 24 months

Source: WSI Collective Agreement Archive 2000

Calculated on an annual basis, collectively agreed pay increased by an average of 2.4% in 2000. For the first time, the increase in east German pay levels (2.3%) was slightly below the increase in west German levels (2.4%) - mainly as a result of an extensive pay freeze in the east German construction industry. Overall, the average collectively agreed pay of an east German employee is now about 91.9% of the west German level. Sectoral increases in collectively agreed pay varied between 1.6% and 3.0% - see table 2 below. In most sectors, collectively agreed pay increases were significantly lower in 2000 than in 1999, when the average increase was 3.0%, but slightly higher than in 1998 when the average increase was only 1.8%.

With an inflation rate of 2.0% and an increase in labour productivity of 3.0% in 2000, pay increases have been very moderate and far below the "cost-neutral margin of distribution" (kostenneutraler Verteilungspielraum) of 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 national income.

Table 2. Annual increases in collectively agreed pay, 1998-2000*
Sector 2000 1999 1998
Commerce 3.0% 3.2% 2.3%
Food industry 2.8% 2.7% 2.0%
Investment goods industry 2.6% 3.6% 1.8%
Consumption goods industry 2.5% 2.6% 1.6%
Raw material and production industries 2.5% 2.4% 2.1%
All sectors 2.4% 3.0% 1.8%
Private services 2.3% 2.1% 1.5%
Trade and transport 2.3% 3.0% 2.0%
Horticulture, agriculture, forestry 2.3% 2.3% 2.0%
Banking, insurance 2.0% 3.1% 1.5%
Public services 1.9% 3.2% 1.9%
Energy, water, mining 1.9% 1.9% 1.5%
Construction 1.6% 2.0% 1.3%

* Increases against the previous year;

Source: WSI Collective Agreement Archive 2000

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