Dhe accelerated rise in the price level hits consumers when shopping – but it also makes the work of wage and collective bargaining politicians difficult. This week Claus Weselsky, Chairman of the Union of German Locomotive Drivers (GDL), gave testimony to this: “We are calling for a 1.4 percent wage increase in 2021, with 3.8 percent inflation. That is supposed to be an exaggerated requirement? ”So he defended his position and added: Even if the railway fully fulfills this requirement, the employees will actually get a“ full minus round ”.
The objection is put into perspective a little with the 600 euro corona premium, which is also included in the GDL claims package. With an annual salary of 40,000 euros, that would be an increase of another 1.5 percent – at least for 2021. But if inflation stayed at 4 percent or more for a longer period of time, it would actually be difficult to secure the purchasing power of the train drivers and their colleagues with these demands.
Pressure on unions is increasing
Even if the current wave of strikes is fading at the railways, this shows a new problem that will soon burden many collective bargaining disputes: With inflation, the pressure of employees on the unions to get more wage percentages increases. But the economic situation of many companies does not make this easy after the upheavals of the pandemic. And that is even more true of the state. As is well known, since Corona he has been deeper in the red with his own coffers than it has been for a long time.
The next big collective bargaining dispute, which begins this Thursday, is aimed at precisely these funds: The Verdi union and the DBB Beamtenbund are resolving their new salary claims for a good 1.1 million employees in the public sector in the federal states. Indirectly, it should also go to the income of more than two million civil servants and retirees in the state service. Although these are regulated by law, they are based on the collective bargaining agreements. It will be the first major collective bargaining round in which the unions are already resolving their demands against the background of the significantly accelerated inflation.
The fundamental point of view of Verdi was made clear by its deputy chairman Andrea Kocsis at the end of July, after the Federal Statistical Office announced the jump in the inflation rate to 3.8 percent: “We need strong wage increases for employees, especially because of the rising prices,” she said. “Verdi will therefore continue its offensive wage policy in the industries.” And this offensive attitude will probably be fueled on Monday: Then the statisticians will provide the inflation figure for August.
Conclusion “well above the inflation rate”
The “Industry Days”, at which the DBB and its trade unions have attuned to the collective bargaining round in the public service in recent weeks, also give impressions of the discussion situation. Whether at the teachers’ associations or the police union: The expectation that there would have to be a degree “well above the inflation rate” ran through almost all deliberations, as the summary of the DBB shows. And if that is to apply to the conclusion, experience has shown that the demand would have to set the starting point of collective bargaining one step higher.
In the 2019 state wage round, the unions stood up with a demand of 6 percent, but at least 200 euros more per month. The employers put the volume of this demand at “more than 2.7 billion euros per year” – and even 8 billion euros in the event of a transfer to the civil servants. In the end, increases of 3.2 percent each came out for the years 2019 and 2020 and a further 1.4 percent as of January 1, 2021.
Beyond that, there is currently a collective bargaining round in the construction industry. Negotiations have been underway for the 890,000 employees there since May. This week, the parties to the collective bargaining agreement have resumed their talks after a long break from broadcasting. IG Bau started with a demand of 5.3 percent.
No room for exorbitant wage increases
Michael Hüther, director of the employer-related Institute of German Economy (IW), warns against reacting to inflation with a change in wage policy – especially since this is currently being driven by temporary special effects such as the expiry of the VAT cut in 2020, but also by high raw material prices. The latter, emphasizes Hüther, “causes enormous costs for companies, no additional profits”. It is all the more important that wage policy does not act as an additional price driver by opening up a way for companies to pass rising personnel costs on to prices.
“In combination with the high prices for inputs and raw materials, the risk of being passed on is already very high,” said Hüther of the FAZ. Even greater increases “would increase this risk massively and fuel the notorious wage-price spiral,” he warned . “There is currently no room for exorbitant wage increases – especially since they can endanger the economic recovery.”
While productivity progress has traditionally been the central benchmark for wage policy in the private sector, there is no such guideline in the public sector. The productivity of the police and fire brigade, for example, can hardly be measured in a meaningful way. Because of empty coffers, therefore, simply keeping the income of state employees tight would be the wrong way from Huether’s point of view.
“The state has to invest in the future and needs good minds for this, so it has to orient itself towards general tariff developments,” advises the economist. No more, but also no less – in this way the public purse also makes the best contribution to a favorable development of earnings in the entire economy.