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www.tarifvertrag.de Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck

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Page 1: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

www.tarifvertrag.de

Development of German Collective Bargaining and Wage Policy

Dr. Reinhard Bispinck

Page 2: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Agenda

20-09-2012WSI Summer School 2012 Reinhard Bispinck 2

Basics

Decentralization and differentiation

Collective bargaining and wages in the 2000‘s

Bargaining about low pay and precarious jobs

Re-Stabilization of the collective bargaining system

Page 3: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Basics

Collective agreements between union and employers associations and single employers

Multi-employer and sectoral agreements prevailing

Company agreements of minor importance

Totally: 67.000 valid collective agreements

5.800 negotiated agreements in 2011

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Page 4: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Declining bargaining coverage since the 1990‘s

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7673

70 71 70 7068 67

6563 63

6563

6163

5755 56 55 54 53 53

54 5452 51

50 49

6865

63 64 63 6361

5957 56 55 56 56

5452

46 4745 44 44

42 42 41 41 4038 37 37

35

40

45

50

55

60

65

70

75

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Collective Bargining Coverage in Germany 1998-2011, in % of all employees

West Germany East Germany West sector agreements East sector agreements

Source: IAB

Page 5: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Bargaining coverage 2011

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Page 6: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

… by sector and employees 2011

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16 40 40 41

46 40

51 50 52 52

63 77

66 86

7 3 4 4

5 15

8 10

11 12

3 3

20 12

- 10 20 30 40 50 60 70 80 90 100

Information/Communication

Agriculture et al.

Hotels and other services

Trade

Economic, scientific, freelance services

Traffic and Logistics

Total

Manufacturing

Non-profit organisations

Health, Education

Construction

Financial Services

Energy, Water, Waste, Mining

Public services, Social insurance

Collective bargaining coverage 2011 by sectors, in % of employees

Sector agreement Company agreement

Source: IAB

Page 7: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Coverage by firm-size

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28

46

62

75

93

59

0

10

20

30

40

50

60

70

80

90

100

1-9 10-49 50-199 200-499 500 and moreemployees

total

Coverage by firm-size, in % of employees

Page 8: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Coverage by income quintiles, in %

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32

41

51

58

68

51

0

10

20

30

40

50

60

70

1.Quintile 2.Quintile 3.Quintile 4.Quintile 5.Quintile Total

Page 9: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Low collective bargaining coverage

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Page 10: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Growing pressure on collectively agreed standards

Persistent mass unemployment since the mid 1990‘s

Increasing international competitive pressure

Shareholder value approach

De-Regulation and flexibilisation of the labour market since 2003

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Page 11: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Decentralization and differentiation of c.a. Flexibilisation at establishment-level with stable

standards e.g. working time flexibilisation within 35-hours-week

Decentralization undercutting the collectively agreed standards

„Wild“ decentralization Pacts for employment and competitiveness at firm-level

„Controlled“ decentralization Company agreements

„Corridors“ in sectoral agreements

Opening clauses

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Page 12: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Opening clauses

Hardship or general clauses Basic pay

(monthly pay, pay increase)

Bonus(annual bonuses, holiday allowances etc.)

Working time (extension, reduction, flexibilisation)

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Page 13: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Issues of opening clauses

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Page 14: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Company level deviations metal industry

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Page 15: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Counter concessions

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Page 16: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Works councils: decentralization „ambiguous“ or „generally problematic“

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Page 17: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Collective agreements and (no) works councils

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Page 18: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Bargaining in the 2000‘s

Key issues

Wages and salaries

Safeguarding employment

Low pay

Precarious jobs

Pension schemes, demographic change

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Page 19: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Collectively agreed pay

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130,1

100,0

105,0

110,0

115,0

120,0

125,0

130,0

135,0

140,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Collectively agreed pay 2000 - 2012, (2000 = 100)

Total

Source: WSI Agreement

Page 20: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Collectively agreed pay

20-09-2012WSI Summer School 2012 Reinhard Bispinck 20

130,1

121,7

100,0

105,0

110,0

115,0

120,0

125,0

130,0

135,0

140,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Collectively agreed pay 2000 - 2012, (2000 = 100)

Total

Consumer prices

Source: WSI Agreement

Page 21: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Collectively agreed pay

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136,2

130,1

121,7

100,0

105,0

110,0

115,0

120,0

125,0

130,0

135,0

140,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Collectively agreed pay 2000 - 2012, (2000 = 100)

Prices +productivity

Total

Consumer prices

Source: WSI Agreement

Page 22: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Growing differences

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Page 23: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Negative wage drift

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126,7

116,0

100,0

105,0

110,0

115,0

120,0

125,0

130,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Collectively agreed Actual pay

Page 24: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Real wages

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Page 25: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Real actual pay

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Page 26: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Real gross pay 2000-2010 byincome deciles in % (full time employees)

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Source: DIW 2011

Page 27: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

The gap is widening again…

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149,9

118,8

100,0

110,0

120,0

130,0

140,0

150,0

160,0

170,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Property and entrepreneurial income Compensation of employees

Source: Destatis

Page 28: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Falling wage share of national income

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Page 29: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Weak private consumption andstrong export in real terms

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105,6

180,6

90,0

100,0

110,0

120,0

130,0

140,0

150,0

160,0

170,0

180,0

190,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

privaterKonsum

Exporte

Page 30: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

20-09-2012

42,236,0

21,319,5

19,018,8

16,716,2

15,114,214,2

10,77,2

6,36,15,7

4,94,84,4

‐1,8

‐5,0 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 40,0 45,0

CZSKIREPLHUFISEDKNLUKUSFR

EU 27GRPTBEITESATDE

WSI Summer School 2012 Reinhard Bispinck 30

Source: AMECO

Real compensation in Europe 2001-2011 in %

Page 31: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Rapid increase of low wage earners in %

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Page 32: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Low wage earners in Europe

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Page 33: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Bargaining about precarious jobs and low pay

Collective agreements: Equal pay agreements for temp agency workers on company

and sectoral level

Specific collective agreements on pay and conditions with tempagency employer organisations

Sectoral minimum wages on the basis of the posted workersact

Collective agreements on the vocational training capacity and on the takeover of the trainees after completion of their apprenticeship

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Page 34: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Temp agency workers

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Collectively agreed additional allowances in : Metal industry Chemicals Plastics Rubber industry Railway

Page 35: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Temp agency workers

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Additional allowances in metal industry after:

6 weeks: + 15 % 3 months: + 20 % 5 months: + 30 % 7 months: + 45 % 9 months: + 50 %

Page 36: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Temp agency workers allowances in metal sector

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Metal basic pay Temp workers pay Allowance

Page 37: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Re-Stabilization of collective bargaining system

Union efforts:

Regaining organizational power

Improving bargaining coverage

Control for correct implementation of c.a.

Political measures:

Re-regulation of the labour market

Reform of the restrictive extension procedure

More sector-related minimum wages

General statutory minimum wage

Public procurement bound to collectively agreed pay and conditions20-09-2012WSI Summer School 2012 Reinhard Bispinck 37

Page 38: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Summary

Erosion of the bargaining system by continous decline of coverage

Shift from sectoral to company level by decentralisation weakens the binding regulations of the c.a.

Moderate wage development: 2000‘s a lost decade

Increasing low pay sector and precarious jobs trigger collective bargaining activities of the unions

Re-stabilisation of the collective bargaining system requires political and legislative support

20-09-2012WSI Summer School 2012 Reinhard Bispinck 38

Page 39: Development of German Collective Bargaining and Wage Policy · Development of German Collective Bargaining and Wage Policy Dr. Reinhard Bispinck. ... Company agreements of minor importance

Thank you very much!tarifvertrag.detwitter.com/WSITarifarchivfacebook.com/wsi.tarifarchiv

20-09-2012WSI Summer School 2012 Reinhard Bispinck 39