Interim report on 2009 bargaining round

In June 2009, the Institute of Economic and Social Research presented its interim report on Germany’s 2009 round of collective bargaining. The study evaluates the collective agreements concluded in the first half of 2009, affecting about 25% of all employees covered by such agreements. Calculated on an annual basis, the average increase in wages and salaries will amount to about 3% in 2009, which is slightly above the average pay increase of 2.9% in 2008.

In June 2009, the Collective Agreement Archive (Tarifarchiv) of the Institute for Economic and Social Research (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) within the Hans Böckler Foundation (Hans-Böckler-Stiftung) published its interim report (in German) on the 2009 collective bargaining round. The study evaluates all collective agreements concluded by trade unions affiliated to the Confederation of German Trade Unions (Deutscher Gewerkschaftsbund, DGB) in the first half of 2009. These new collective agreements cover 3.9 million employees (of whom 0.7 million are in eastern Germany), which accounts for about 20% of all employees covered by collective agreements. A further 8.1 million employees will receive pay increases in 2009 that have been agreed in previous years.

Calculated on an annual basis, the average pay increase in wages based on collective agreements for 2009 will be around 3%, which is slightly above the average increase of 2.9% in 2008 (DE0802019I). The average increase in eastern German pay levels is estimated to be about 3.5%, thereby bringing this year’s increases above the western German level (Table 1). Average collectively agreed pay in eastern Germany will amount to around 96.1% of average western German pay levels in 2009, which is below the 96.7% reached at the end of 2008 (DE0807019I). This decline is due to changes in the wage structure in the metalworking industry.

Table 1: Increases in collectively agreed pay, by sector (%)*
Sector Western Germany Eastern Germany Germany
Horticulture, agriculture, forestry 2.9 3.7 3.3
Energy, water, mining 4.0 3.6 4.0
Raw materials and production industries 2.5 3.9 2.6
Investment goods industry 3.5 3.4 3.5
Consumption goods industry 2.6 2.3 2.5
Food industry 2.6 2.9 2.6
Construction industry 2.6 2.8 2.7
Commerce 1.2 3.0 1.2
Transport and communications 2.8 3.8 2.9
Financial services (banking, insurance) 1.8 1.8 1.8
Private services, non-profit associations 2.3 2.3 2.3
Public services, social security 3.6 4.4 3.8
All sectors 2.9 3.5 3.0

Note: * Annual pay increases in 2009 compared with 2008. Figures are calculated on the basis of all pay increases coming into effect in 2009, collectively agreed either in the first half of 2009 or in previous years.

Source: WSI Collective Agreement Archive 2009 (as at 30 June 2009)

Main agreements

On 1 March 2009, the Employers’ Association of German Länder (Tarifgemeinschaft deutscher Länder, TdL) and a bargaining association of trade unions in the public sector led by the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) agreed on a new collective agreement that will cover about 605,000 public sector employees in all federal states (Länder), with the exception of Hesse in west-central Germany and Berlin in the northeast (DE0904019I). The collective agreement covers the period from 1 January 2009 to 31 December 2010. It provides for a one-off payment of €40 for January and February 2009, a general pay increase of €40 followed by an increase of 3% with effect from 1 March 2009 and a further general pay increase of 1.2% taking effect on 1 March 2010. Partly as a form of compensation for the general €40 increase in March 2009, a performance-related payment – introduced with effect from 1 January 2007 (DE0606029I) and amounting to at least 1% of the pay-roll of the public sector employers concerned – was removed from the collective agreement.

On 1 April 2009, the German Metalworkers’ Union (Industriegewerkschaft Metall, IG Metall) and the employers’ association for the German steel industry (Arbeitgeberverband Stahl) agreed on a new package of collective agreements, covering some 91,000 employees in the northwestern German steel industry of North Rhine-Westphalia, Lower Saxony and Bremen. The agreements provide for a €350 one-off payment covering the period between April and December 2009 and a general pay increase of 2%, which will take effect on 1 January 2010.

On 23 May 2009, following a joint dispute resolution procedure, the Trade Union for Building, Forestry, Agriculture and the Environment (Industriegewerkschaft Bauen-Agrar-Umwelt, IG BAU) and two employer organisations – the Federal Association of the German Building Industry (Hauptverband der Deutschen Bauindustrie, HDB) and the Central Association of the German Building Industry (Zentralverband des Deutschen Baugewerbes, ZDB) – reached a new collective agreement on pay covering some 400,000 workers in the construction industry. The agreement provides for a lump sum payment of €60 for April and May 2009, followed by a general pay increase for western Germany of 2.3% with effect from 1 June 2009 and a further increase of 2.3% with effect from 1 April 2010. In eastern Germany, wages will increase effectively by 2.6% each year, respectively. Furthermore, the parties agreed on new rates for the collectively agreed national minimum wages in the construction industry which also apply to posted workers (Table 2). As part of the compromise, the hourly rate for skilled construction workers (scale 2, currently at €9.80 in eastern Germany) is no longer part of the minimum wage agreement in eastern Germany.

Table 2: New minimum wage rates in the construction industry, by hourly rates (€)
  Western Germany   Eastern Germany  
Valid from Scale 1 Scale 2 Scale 1 Scale 2
1 September 2008 10.70 12.85 (Berlin: 12.70) 9.00 9.80
1 September 2009 10.80 12.90 (Berlin: 12.75) 9.25 -
1 September 2010 10.90 12.95 (Berlin: 12.75) 9.50 -
1 September 2011 11.00 13.00 (Berlin: 12.85) 9.75 -

Source: WSI Collective Agreement Archive, July 2009

Other collective pay agreements concluded in the first half of 2009 included those in sectors such as textiles and garment, retail trade, banking and confectionery (Table 3).

Table 3: Selected pay agreements concluded up to June 2009
Date Bargaining area Outcome
31 December 2008 Deutsche Bahn AG (German Rail) General pay increase of 2.5% from 1 February 2009, followed by a one-off payment of €500 in December 2009 and a further pay increase of 2% from 1 January 2010; duration until 31 July 2010.
10 March 2009 Textiles and garment industry, western Germany Two ‘zero months’(March and April 2009) with no pay increase, followed by a one-off payment of €340 for May to December 2009. General pay increase of 1.5% plus €40 with effect from 1 January 2010, followed by a one-off payment of €99 for January and February 2011.
13 March 2009 Deutsche Telekom AG (German telecom) General pay increase of 3% with effect from 1 January 2009, followed by an increase of 2.5% from 1 January 2010; duration until 31 December 2010.
22 April 2009 Banking Four ‘zero months’(July to October 2009) with no pay increase, followed by a 2.5% pay increase with effect from 1 November 2009 and a one-off payment of €200 in February 2010; duration until 30 April 2010.
12 May 2009 Confectionery industry Two ‘zero months’(April and May 2009) with no pay increase, followed by a 3% pay increase with effect from 1 June 2009 and a 1.9% pay increase from 1 April 2010; duration until 31 March 2011.
3 June 2009 Printing One-off payment of €280 for April 2009 to March 2010, followed by a general pay increase of 2% with effect from 1 April 2010; duration until 31 March 2011.
11 June 2009 Retail tradeNorth Rhine-Westphalia Four ‘zero months’(May to August 2009) with no pay increase, followed by a 4% pay increase from 1 September 2009, a 1.5% pay increase from 1 September 2010 and a one-off payment of €150 in April 2010; duration until 30 April 2011.

Source: WSI Collective Agreement Archive, July 2009

Gender pay gap

Although a considerable gap in earnings between men and women continues to exist in Germany (DE0806019I), special provisions to tackle wage discrimination and to promote equal opportunities were not included in those collective agreements concluded in the first half of 2009.

Commentary

Collectively agreed pay increases in the first half of 2009 were, on average, slightly above those concluded in 2008. The effects of the economic crisis were only partly felt. An example was certainly the steel industry where this year’s bargaining outcome fell well below the increases agreed in 2008. In banking – an industry already affected by the financial crisis in 2008 – the parties finally agreed to settle in April 2009 after bargaining had already started in the summer of 2008. The bargaining round for public employees in the federal states was marked by an astonishingly large strike mobilisation of teachers, particularly in eastern Germany, which certainly helped in reaching a comparatively quick settlement. Furthermore, it seemed that public authorities had no interest in a lengthy dispute as the general parliamentary elections will be held in September. A comparatively short bargaining round was also seen in retail trade where disputes dragged on for more than a year in previous years. In 2009, the sector’s social partner organisations reached a pilot agreement after only a little more than two months of negotiations.

Heiner Dribbusch, Institute of Economic and Social Research (WSI)

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