Germany: Latest developments in working life Q1 2019

The current economic and labour market situation in Germany, collective bargaining agreements in the steel, airport security and public sectors, and the introduction of a minimum wage for apprentices are the main topics of interest in this article. This country update reports on the latest developments in working life in Germany in the first quarter of 2019.

German economy wobbles while labour market holds steady

After a drop in the third quarter of 2018, the GDP in Germany showed neither a negative nor a positive trend by the beginning of 2019. Experts, however, expect that the German economy will continue to lose further momentum. The Federation of German Industries (BDI) adjusted its growth prognosis for 2019 from 1.5% to 1.2%. [1] The BDI argues that foreign economic uncertainties in relation to the UK and the USA are a strain on Germany’s foreign trade.

Despite the current state of the German economy, the labour market continues to be stable. The number of unemployed people fell to 2.37 million in February (173,000 fewer unemployed people than in February 2018), while the number of employed people increased to 44.79 million (477,000 more employed people than in February 2018). The unemployment rate stood at 5.3% in February 2019.

Resolution for collective bargaining conflicts

Collective bargaining took place in the steel, airport security and public sectors in the first quarter of 2019. While the bargaining was marked by conflict, including numerous strikes, a number of new agreements were reached.

The Industrial Union of Metalworkers (IG Metall) agreed to a new collective bargaining agreement in the steel industry in March 2019, which will affect approximately 72,000 employees. [2] The new agreement will last for 26 months and includes:

  • a wage increase of 3.7% starting in March 2019
  • a lump sum payment of €100 for January and February 2019
  • an annual lump sum payment of €1,000 due on 31 July 2020, which can be converted into five additional vacation days
  • a monthly wage increase for apprentices of between €88 and €188

Collective bargaining in the airport security sector was accompanied by several warning strikes at airports throughout Germany in January 2019, including in Berlin, Frankfurt, Munich and Cologne. By the end of the month, the United Services Union (ver.di), the German Civil Service Federation (DBB) and the Federal Association of Aviation Security Companies (BDLS) agreed on the first nationwide collective bargaining agreement for airport security personnel. Previously, collective bargaining agreements for the sector varied by region.

The new agreement sets out an annual wage increase of between 3.5% and 9.8% (depending on the region) for the next three years. The overall wage increase will range between 10.5% and 26.7%. Part of the aim of the agreement is to bring the wage level in eastern Germany in line with that of western Germany. [3] 

However, in mid-February, ver.di informed the BDLS that the union intended to re-negotiate the agreement following a negative response from members. [4] Re-negotiations of previously agreed collective bargaining agreements are very unusual in Germany. The DBB signed the latest agreement with the BDLS on 12 April 2019. [5] 

Both ver.di and the DBB also started negotiations with the Employers’ Association of German States (TdL) on a new collective bargaining agreement for the public sector in the first quarter of 2019. The unions emphasised the need to prevent the wage gap between the public and private sectors from increasing. Eckhardt Rehberg, spokesperson on budget policies for the Christian Democratic Union of Germany (CDU), urged caution and highlighted the financial responsibilities of the municipalities.[6] 

After two unsuccessful rounds of negotiations, warning strikes were held at hospitals, tax administration offices and schools. Employers and unions finally came to an agreement in early March, which will affect approximately 800,000 employees in Germany. [7] The new agreement will last 33 months and includes:

  • an overall wage increase of 8% in three steps (3.2% from 1 January 2019, 3.2% from 2020 and 1.4% from 2021)
  • an additional wage increase for nursing staff of €120
  • a higher starting wage for all wage groups

Minimum wage for apprentices proposed

The CDU and the Social Democratic Party of Germany (SPD) agreed on a plan to set a minimum wage for apprentices as part of a plan to strengthen dual vocational training in Germany. The proposal sets a new minimum wage of €504 for apprentices in their first year of training, a sum which is on a par with the education advancement grant (BAFöG) for students not living at home. The parties intend to implement the concept by 1 January 2020.

The Confederation of German Employers’ Associations (BDA) opposes the government’s plan on the grounds that it interferes with the principle of free collective bargaining and brings the competence of social partners into question. Furthermore, the BDA feels that a minimum wage might threaten the future of vocational training in weaker economic sectors and regions. [8]

The German Trade Union Confederation (DGB) generally supports the government’s plan. However, it advocates for a significantly higher minimum wage for apprentices of €635 in the first year of training. [9] The DGB believes that a higher minimum wage would be an effective way of encouraging young people not to drop out of their vocational studies, while also making training a more attractive option.


Footnotes

  1. ^ BDI (2019), Quartalsbericht Deutschland I/2019 , 11 March.
  2. ^ IG Metall (2019), Stahlwerker bekommen 3,7 Prozent mehr Geld , 17 March.
  3. ^ ver.di (2019), Erster bundesweiter Entgelttarifvertrag für Luftsicherheitskräfte , 24 January.
  4. ^ Mitteldeutscher Rundfunk (2019), Verdi will Tarifvertrag für Airport-Sicherheitskräfte nachverhandeln , 18 February.
  5. ^ BDLS (2019), Tarifvertrag endlich unterzeichnet – Endlich höhere Löhne für Luftsicherheitskräfte , 12 April.
  6. ^ Rheinische Post (2019), Tarifverhandlungen der Länder: CDU-Haushaltspolitiker mahnt zur Mäßigung , 22 January.
  7. ^ ver.di (2019), Tarif- und Besoldungsrunde mit der Tarifgemeinschaft der Länder. 380 Euro auf einen Schlag , 2 March.
  8. ^ BDA (2019), Stellungnahme zum Entwurf eines Gesetzes zur Modernisierung und Stärkung der beruf-lichen Bildung , 8 January.
  9. ^ DGB (2019), Ausbildung: Mindestens 635 Euro im ersten Jahr , 12 February.

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