Collectively agreed wages go up by 2% in 2011

In January 2012, the Institute for Economic and Social Research reported on Germany's 2011 collective bargaining round. It evaluated the agreements affecting 9.2 million employees, or about 49% of all those covered by a collective agreement. Another 7.4 million employees received previously agreed pay increases. The average increase in collectively agreed wages was 2%. The Federal Statistical Office said actual monthly gross wages increased by 3.4% in 2011.

Background

An annual report (in German, 1.18Mb PDF) on the 2011 collective bargaining round was published, in January 2012, by the Collective Agreement Archive of the Institute for Economic and Social Research (WSI) within the Hans Böckler Foundation (HBS). The study evaluates collective agreements concluded by trade unions affiliated to the Confederation of German Trade Unions (DGB) in 2011, affecting some 9.2 million employees, or about 49% of all those covered by a collective agreement. Another 7.4 million employees received pay increases in 2011 which had been agreed in previous years.

In 2011, the trade unions initially made claims for pay increases of between 5% and 7%, with only the coal mining unions making no specific demand.

Collectively agreed pay increases

The average collectively agreed increase in wages and salaries was 2% in 2011 (it was 1.8% in 2010). In western Germany the average collectively agreed increase was 2%, whereas it was 2.2% in eastern Germany. The pay increases varied from sector to sector, between 1.1% in banking and insurance and 2.8% in private services and the non-profit sector. Table 1 gives an overview of average collectively agreed pay increases in wages (in %) based on collective agreements in various economic sectors calculated on an annual basis for the years 2007 to 2011.

Table 1: Annual increases in collectively agreed pay, according to sector (in %), 2007–2011*
Sector 2011 2010 2009 2008 2007
Construction

2.3

2.4

2.4

3.0

2.0

Food industry

2.3

2.4

2.4

2.5

2.2

Transport and Communication

1.6

2.3

2.9

3.5

2.2

Raw material and production industries

2.2

2.2

2.5

3.3

2.6

Horticulture, agriculture, forestry

1.6

1.6

2.8

3.7

1.7

Investment goods industry

1.8

1.0

3.3

2.6

3.4

Consumption goods industry

2.0

1.8

2.4

2.8

2.5

Distributive trades

2.0

2.5

1.4

1.9

2.0

Energy, water, mining

2.1

2.9

4.1

3.0

2.0

Private services, non-profit sector

2.8

2.2

1.9

3.0

1.4

Banking, insurance

1.1

1.8

1.8

2.7

1.8

Public services, social security

1.8

0.9

3.7

4.4

0.6

All sectors

2.0

1.8

2.6

2.9

2.2

* Increases against the previous year; Source: WSI Collective Agreement Archive 2011

According to the Federal Statistical Office (destatis), actual monthly gross wages and salaries increased by 3.4% in 2011 (against 2.2% in 2010).

The trend of recent years to extend the duration of collective agreements was broken. The average duration of pay agreements signed in 2011 was 22.8 months (against 24.3 months in 2010). In eastern Germany the duration of collective agreements in the past tended to be longer than in the western German bargaining areas; this pattern - which was reversed in 2007 and 2009 - is now back again. Table 2 shows the average duration of collective agreements in western and eastern Germany between 2002 and 2011.

Table 2: Average Duration of Collective Agreements (in months)
  2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Western Germany

18.1

20.4

21.8

25.2

21.6

22.2

22.2

24.3

23.6

22.6

Eastern Germany

19.7

21.0

22.0

28.4

24.7

21.9

23.4

23.2

28.3

23.9

Source: WSI Collective Bargaining Archive

A number of collective agreements contained so-called zero months; those within the duration of the collective agreements in which the agreed pay increase was delayed. Table 3 shows the outcomes of various sectoral wage negotiations in 2011.

Table 3: Selected pay agreements of 2011 bargaining round
Date Sector Provisions

31 January 2011

Private Transport, North-Rhine Westphalia

No increase for four months (December 2010 – March 2011); 3.1% increase on 1 April 2011;1.7% increase on 1 March 2012;duration of 27 months until 31 December 2012

8 February 2011

Volkswagen AG

One-off payment worth 1% of annual wage, at least €500 for period February – April; 3.2% increase on 1 May 2011; duration 16 months until 31 May 2012

23 February 2011

Hotels & Restaurants,

Baden-Wuerttemberg

No increase for three months (January – March); 2.9% increase on 1 April 2011; 2.4% increase on 1 July 2012; duration 30 months until 30 June 2013

10 March 2011

Public sector;

Federal States Level

One-off payment of €360 for period from January to March 2011; 1.5% increase on 1 April 2011; 1.9% plus €17 increase on 1 July 2012; duration of 24 months until 31 December 2012

31 March 2011

Chemicals industry

(DE1104029I)

No increase for one month; 4.1% for 14 months;duration 15 months according to region until end of May, June or July 2012

14 April 2011

Construction industry

No increase for one or two months (April and May); 3.0% increase on 1 May 2011 (West Germany); 3.4% increase on 1 June 2011 (East Germany);2.3% on 1 June 2012 (West); 2.9% increase on 1 August 2012 (East);duration 24 months until 31 March 2013

10 June 2011

Retail industry;

Baden-Wuerttemberg

No increase for two months (April and May);3.0% increase on 1 June 2011;one-off payment in April 2012;2% increase on 1 June 2012;duration 24 months until 31 March 2013

29 June 2011

Printing Industry

One-off payment of €280 for period from April 2011 to July 2012;2% increase on 1 August 2012;one-off payment of €150 in July 2013;duration of 33 months until 31 December 2013

21 July 2011

Insurance sector

(DE1108019I)

One-off payment of €350 for period from April to August 2011 (€450 for lower wage scales);3% increase on 1 September 2011,2.2% increase on 1 October 2012;duration of 24 months until 31 March 2013

30 September 2010

Steel industry;

North-Rhine Westphalia, Lower Saxony and Bremen;(DE1112029I)

No increase for one month (November);3.8% increase on 1 December 2011;duration 16 months until 28 February 2013

7 December 2011

Paper processing industry

One-off payment of €70 for December 2011;3% increase on 1 January 2012;1.6% increase on 1 January 2013;duration of 18 months until 31 May 2013

Source: WSI Collective Bargaining Archive

Development of effectively paid wages

According to the Federal Statistical Office, actual monthly gross wages and salaries increased by 3.4% in 2011. Inflation was 2.3% in 2011. As a consequence, real average collectively agreed basic wages fell by 0.3% in 2011. However, with regard to effectively paid monthly gross wages there was a positive wage drift in 2011, and real monthly gross wages increased by 1.1%. The reasons for this positive wage drift are to be found in less short-time work and more overtime as well as in non collectively-agreed bonus payments in several industries and companies.

Gender pay gap

Although a considerable gap continues to exist in the average earnings between men and women in Germany (23% in 2009 according to destatis figures), special provisions to tackle wage discrimination were not included in the collective agreements concluded in 2011.

Disputes and prominent bargaining rounds

There were more strikes in 2011 than in 2010. The United Services Union (ver.di) recorded 170 incidents of industrial action (compared to 100 in the previous year). Most of them were disputes concerning company-level agreements in the private service sector. The largest stoppages in terms of the number of employees taking part were during the course of several waves of warning strikes in the 2011 public sector bargaining round at federal state level.

On 18 August 2011 the German Federation of Journalists (DJV), the German Union of Journalists (dju) within ver.di and the Federation of German Newspaper Publishers (BDZV) signed new collective agreements covering some 14,000 editorial staff working on daily newspapers (DE1109019I).This settlement followed more than 12 months of negotiations and many instances of industrial action involving several thousand journalists at various newspapers. The most contested issue in this bargaining round was the employers’ demand that the salaries of new entrants should be slashed, which was defeated by the unions. Both parties finally agreed on a compromise; a new clause for 2012 and 2013 allows management and works councils to agree on substantial cuts in both holiday pay and annual bonuses, of up to 50% of an employee’s monthly salary, in the event of economic difficulties. In exchange, the employers have to agree to no dismissals. Further cuts in pay may be allowed only with the agreement of the unions and employers’ associations.

During the 2011 bargaining round in the German steel industry more than 17,000 workers walked out in warning strikes (DE1112029I). Besides a new pay settlement, the bargaining parties also agreed that employers must provide apprentices with a permanent employment contract upon completion of training. Exceptions to this are allowed only under specific, defined circumstances.

Heiner Dribbusch, Institute of Economic and Social Research, WSI

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