Interim report on 2011 bargaining round

In July 2011, the Institute of Economic and Social Research presented its interim report on Germany’s 2011 round of collective bargaining. The study evaluates the collective agreements concluded in the first half of 2011, affecting about 25% of all employees covered by such agreements. Calculated on an annual basis, the average increase in wages and salaries will be around 2% in 2011, which is above the average of 1.7% in 2010. This rise reflects the improvement in the economy.

In July 2011, the Collective Agreement Archive (Tarifarchiv) of the Institute for Economic and Social Research (WSI) within the Hans Böckler Foundation (Hans Böckler Stiftung) published its interim report (in German, 860Kb PDF) on the 2011 collective bargaining round. The study evaluates all collective agreements concluded by trade unions affiliated to the Confederation of German Trade Unions (DGB) in the first half of 2011. These new collective agreements cover 4.5 million employees (of which 0.6 million live in eastern Germany), which accounts for about 25% of all employees covered by collective agreements. In 2011, a further 7.8 million employees are to receive pay increases agreed in previous years.

Calculated on an annual basis, the average pay increase based on collective agreements for 2011 will be around 2%, which is above the average increase of 1.7% in 2010 (DE1102019I). The average increase in eastern German pay levels is estimated to be about 2.2%, thereby bringing this year’s increases above the western German level (Table 1). The average collectively agreed pay in eastern Germany will amount to around 96.6% of average western German pay levels in 2011, which is slightly above the 96.2% reached at the end of 2010.

Table 1 gives an overview of average increases in wages, based on collective agreements in various economic sectors calculated on an annual basis for 2011. Figures are calculated on the basis of all pay increases coming into effect in 2011, collectively agreed either in the first half of 2011 or in previous years.

Table 1: Increases in collectively agreed pay, by sector, 2010–2011 (%)

Sector

Western Germany

Eastern Germany

Germany

Horticulture, agriculture, forestry

1.4

1.7

1.5

Energy, water, mining

2.9

0.0

2.3

Raw materials and production industries

2.1

2.1

2.1

Investment goods industry

1.8

1.6

1.7

Consumer goods industry

2.0

1.9

2.0

Food industry

2.2

2.7

2.3

Construction industry

2.6

2.6

2.6

Commerce

2.1

2.1

2.1

Transport and communication

1.7

0.7

1.6

Banking, insurance

0.2

0.2

0.2

Private services, non-profit associations

2.7

3.6

2.9

Public services, social security

1.8

1.9

1.8

All sectors

2.0

2.2

2.0

Source: WSI Collective Agreement Archive 2011 (as at 30 June 2011)

Major settlements

On 10 March 2011, the Employers’ Association of German Länder (TdL) and the United Services Union (ver.di) agreed on a new collective agreement that will cover about 585,000 public sector employees in all federal states except Hesse and Berlin. Employees will receive a one-off payment of €360 for the months from January 2011 to March 2011. This is followed by a general pay increase of 1.5% from 1 April 2011, and a further general pay increase of 1.9% plus a general increase of €17 from 1 January 2012. The total duration of the agreement is 24 months until 31 December 2012.

The German Federation of Chemicals Employers’ Associations (BAVC) and the Mining, Chemicals and Energy Industrial Union (IG BCE) reached a compromise on a new collective agreement on 31 March 2011 (DE1104029I). The agreement affects approximately 550,000 employees in around 1,900 establishments in the chemical industry. There will be a wage increase of 4.1% for all employees in the industry. In general, pay rises are to be introduced in the second month after the new agreement has taken effect in each region. Trainees are not included and will get a pay rise of €35 per month. BAVC and IG BCE have agreed that the wage increase can be postponed for economic reasons by the social partners at the establishment level for a maximum of two months. The management and works council in prospering companies can, however, agree to bring forward the wage increase and start paying higher wages from the very first month of the new agreement.

In April 2011, the Trade Union for Building, Forestry, Agriculture and the Environment (IG BAU) and the two employer organisations in the construction sector – the Central Association of the German Construction Industry (ZDB) and the Federal Association of the German Construction Industry (HDB) – agreed a new collective agreement on pay in the construction sector covering some 562,000 employees. Following a so-called ‘zero-month’ with no increase (April) the settlement provides for a general wage increase in western Germany and Berlin of 3% from 1 May 2011, and a further increase of 2.3% from June 2012. Following two zero-months (April and May), wages in eastern Germany were to rise by 3.4% from June 2011, followed by a further general increase of 2.9% from August 2012. The agreement will last 24 months. In addition, the binding minimum wages applying to the construction sector will be increased in four stages between 1 January 2012 and 1 January 2013 – see Table 2.

Table 2: Hourly collectively agreed minimum wages in the construction sector (in euros)
   

July 2011*

January 2012

January 2013

West Germany (including Berlin)

Scale 1

11.00

11.05

11.05

 

Scale 2 (skilled work)

13.00 (Berlin: 12.85)

13.40 (Berlin: 13.25)

13.70 (Berlin: 13.55)

East Germany**

Scale 1

9.75

10.00

10.25

Note: * agreed in 2009; ** no minimum wage in scale 2 in eastern Germany

Source: WSI

On 9 June 2011, following several weeks of strike action, the bargaining parties in the retail trade in Baden-Württemberg agreed on a new package of collective agreements for the sector’s employees. Signatories to the agreement were, on the trade union side, ver.di and, on the employer side, the regional affiliates of the Employer Association for Retail Trade (HDE). The parties agreed on two ‘zero-months’ and a general increase of 3% on 1 June 2011 followed by another 2% on 1 June 2012. Besides pay, the parties agreed on the introduction of general paid leave of 36 working days (six weeks) of paid leave, as in retail the standard working week runs from Monday to Saturday. Other collective pay agreements concluded in the first half of 2010 included those for car manufacturer Volkswagen, coal mining and retail – see Table 3.

Table 3: Selected pay agreements concluded up to June 2011

Date

Bargaining area

Outcome

25 January

Deutsche Bahn (German Rail)

One-off payment of €500 for August–December 2010; 2 ‘zero-months’ (January–February 2011); 1.8% on 1 March 2011; 2% on 1 January 2012; duration until 31 December 2012

31 January

Private Transport, North-Rhine Westphalia

4 ‘zero-months’ (December 2010–March 2011); 3.1% increase on 1 April 2011; 1.7% on 1 March 2012; duration until 28 February 2013

8 February

Volkswagen

1% of annual wage (at least €500) as one-off payment for February–April 2011; 3.2% on 1 May 2011; duration until 31 May 2012

21 February

Coal mining

€600 one-off payment for January–March; 3.3% on 1 April 2011; duration until 31 December 2012

10 March

Public sector (federal state level)

€360 one-off payment for January–March; 1.5% on 1 April 2011; 1.9% plus €17 general increase on 1 January 2012; duration until 31 December 2012

31 March

Chemicals industry

One ‘zero-month’ and 4.1% general pay increase (different starting months depending on region); duration depending on region until 31 May, 30 June and 31 July 2012

14 April

Construction industry

One or two ‘zero-months’; 3% on 1 May 2011 (West), 3.4% on 1 June 2011 (East); 2.3% on 1 June 2012 (West), 2.9% on 1 August 2012 (East); duration until 31 March 2013

20 May

Wholesale tradeBaden-Württemberg

One ‘zero-month’ (April); 3% on 1 May 2011, 2.4% on 1 May 2012; duration until 31 March 2013

9 June

Retail tradeBaden-Württemberg

Two ‘zero-months’ (April, May); 3% on 1 June 2011; 2% on 1 June 2012; duration until 31 March 2013

Source: WSI Collective Agreement Archive, July 2011

Gender pay gap

Although there is still a considerable gap in earnings between men and women in Germany (DE0604019I), special provisions to tackle wage discrimination and to promote equal opportunities were not included in the collective agreements concluded in the first half of 2011.

Commentary

Collectively agreed pay increases in the first half of 2011 were often above those concluded in 2010 but, as prices in 2011 seem to be increasing more than predicted, employees in some industries might not enjoy real wage increases in 2011. Data provided by the Federal Statistical Agency (Destatis) indicate that effective gross wages might increase more than collectively agreed wages. The reason for this is that working hours have been extended in the current boom period and some companies pay non-collectively agreed bonuses to employees.

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

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