09.04.2006 | Manfred Schüle

Objectives of Strike Harm Emplyoment

In two major industries, Metal/Electrics as well as in the Public Services tough public bargaining confrontations are anticipated or already ongoing. The impression prevails, that the heat of the conflict mainly serves the purpose to close the ranks within the untions or regain lost members.

Again in this year the question has to arise, taking into account the claim made by the unions, how long the conditions of employment in Germany can be left to this traditional, strict, inflexible and complicated tariff bargaining framework.

On top of all a totally wrong impression is generated through the media: Where the news are full of „strike“ and „unions“ the simple fact that only one quarter of German employees are members of a union is totally overlooked. A misinterpretation of membership, profiling and political claim.

Neither economical nor social arguments or necessities justify the this years tariff spectacle. Many enterprises have already understood. In the five post-reunion German states only every fifth business subscribes to the tariff agreements. Also in the western part of Germany the number of companies is on the rise which – with or without acceptance of the unions – agree on deviations from the tariff contracts. The metal industry itself has opened its tariff agreements through the so called Pforzheimer Modell in 2004. It allows for deviations from the agreements if for example German jobs can be maintained by these measures. By mid of 2005 among 5500 associated businesses 459 deviations have been recorded (following the German weekly news magazine “Der Spiegel” in No. 42/2005)www.spiegel.de.

This years demands for the salaried employees would be a heavy burden for the competitiveness of labour in Germany. Already today with 27.60 Euro per hour (2004) the industrial labour cost are the highest in the world. An increase of 3% in Germany would demand a 4 – 5% increase in USA, Italy, Spain, France or U.K. only to avoid a further increase of the cost gap. In reality though, these countries seem to aim for increases of 2 – 4%. www.gesamtmetall.de

Also for unit labour cost Germany is „top“:
Germany = 100, USA = 82, England = 100, Jap = 73, Norwegen = 95, Kanada = 73, Italien = 95, Schweden = 84, Frankreich = 88

(Source: IWD Nr. 40/2005) www.iwkoeln.de

A salary increase by 5% – as demanded would also accelerate the process of relocating employment to low cost countries. If the gap in unit labour cost is not to open any further the labour cost in Eastern European countries would need to increase by 30 – 40%. Visible and predictable today is only a range of 3 – 6% today.

The margin in the SMEs with their comparatively high employment would be burdened massively through a 5% increase. Price flexibility is practically nonexistent, energy and material cost are rising.

The tariff conflict in the Public Services, the probably last reserve of unhindered union activity should significantly accelerate the privatization drive in public services by states and communities. Already in the nineties around 2 million jobs perished in the public sector. This trend continues, in the last 12 month another 110.000 jobs have been eliminated – through privatization of public activities. Following calculation of the Federal Bureau for Statistics within only the one year of 2004 a total of 61.000 jobs has been privatized in the communities and another 39.000 in the federal states. Main drivers are labour cost, specifically the salary itself and the weekly labour time.

The argument the union uses, that employment time has to be decreased to avoid a further increase in unemployment, is not valid while this is not based on a proportional decrease of the salary, thus increasing the cost of the “public” labour hour – in German belittled as salary “equalization”. Also for the future the average citizen will not be prepared to pay for this increase. So the belief, that reduction of labour time maintains public jobs is wrong. Not many of these expensive jobs will be replaced if it becomes available in the future.

Therefore from all these perspectives it is easy to conclude, that this year’s tariff bargaining does not make any economical sense to those employed as well as it offers no socio-political opportunity for the employment searching.

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