GERMANY ON ITS WAY TO A MINIMUM WAGE RATE

Minimum wage statistics, as published by Eurostat, refer to monthly national minimum wages. The national minimum wage usually applies to all employees, or at least to a large majority of employees in the country under consideration. Minimum wages are gross amounts, that is, before the deduction of income tax and social security contributions; these deductions vary from country to country. The national minimum wage is enforced by law, often after consultation with social partners, or directly by national intersectoral agreement.

As you can see on the map there are considerable differences in minimum wages between European countries. The highest established minimum wages you find in Luxemburg, France, Belgium and the Netherlands, all neighboring countries of Germany.The lowest minimum wages are in Eastern European countries where costs of living also are lower. In between those two groups are Spain, Portugal and Greece. Remarkable is the fact that Italy, Swiss and the Scandinavian countries with strong unions do not have such a minimum wage arrangement.

It looks that after years the Germans wil get their national minimumwage. The establishment of this minimumwage results from what is called in German “Die grosse Koalition”, the grand coalition. It refers to the coalition between the two big German parties the Christian democratic CDU/CSU and the social-democratic SPD. It was the SPD that supported the proposal of the German trade union confederation, the mighty DGB, to establish a minimum wage rate for all workers in Germany. Such a minimum wage rate should make an end to what is called 'wage dumping', which would lead to modern slavery. May be the word slavery is somewhat exaggerated but it is a fact that in the modern developed German economy people need to work 60 of more hours for having a decent standard of living.

Although the CDU/CSU from Gemany's prime minister Angela Merkel won the elections without any problem, it was not enough to govern alone. Because their preferred political partner, the liberal party FDP, lost the elections Angela Merkel had to look for another coalition partner. Based on only the election figures, it was possible to create a left wing coalition existing of the social democratic SPD, 'die Grünen' (the Greens) and 'die Linke' (the Left ) with a majority in the German Parliament. However, this was only theory. The political divisions between these parties are to big to make a stable political coalition for the next years. That is why the Christian Democrats and Social Democrats were sentenced to one another.

Because of the lack of a minimum wage rate, Germany has become a so called 'low-wage country' in Europe. Dutch and Danish companies are relocating to Germany, where, in particular Polish workers and Eastern Europeans do the heavy and dirty work in abattoirs, metalworking and cleaning companies. People work for 2 to 5 euros per hour while just on the other side of the border wages of 10 to 20 euros per hour are paid.

The lack of a fair minimum wage rate in Germany leads to a lack of fair European competition. Germany competes with other European economies by lower wages. German workers and especially the migrant workers, who are coming from all corners of the world, have to pay the price for a competive German economy by making long working days and weeks and having a lower standard of living.

The level of the minimum wage rate that is buzzing around in and outside Germany is an hourly wage rate of 8,50 Euro. Of course everybody who matters is discussing the question if this is good or bad for Germany. As an export directed economy Germany has succeeded the last years to keep production costs low, compared to other European countries with the result that German products are the best priced quality products on the European and international market. Compete with Germany does not only mean to produce high quality products but also low priced.

Some economists, some politicians and of course a lot of employers fear that an established minimum wage rate will be bad for Germany's export economy and therefore for the whole German economy. Less export means less employment, so at the end the unemployed will pay for the employment of the others. However, others believe that a guaranteed minimum wage rate will give an economic boost to Germany's internal market. Germans are by nature cautious consumers. Because of the financial and economic crisis the Germans are even more cautious by saving more than to spend.

The last months Germany is even critized by the US and the European Commission for not consuming enough. The Commission recently announced to start an investigation of Germany's internal market. The lack of demand of the internal German market would limit the exports for other European countries like for example Italy, Greece and Spain that are in desperate need for a growing export economy. It is seen as not fair that the Germans create wealth, without sharing it with other European economies. It is said that the minimum wage rate could be the correct pulse for the internal market that on its turn would help the other European economies to restore.

"TRADE UNION PLURALISM, REALITY OR DREAM?"

All participants in the seminar on the photo.

Is Trade Union pluralism just a dream or is it reality in the trade union world? Particpants from many different countries of Europe debated on this question based on analysis of the reality in their countries during the seminar “Trade Union pluralism, reality or a dream”, held last week in Berlin, Germany (25-26 September 2013). The seminar was organized by the Danish trade union confederation KRIFA and the European Centre for Workers' Questions EZA in cooperation with the European Organization of the World Organization of Workers (EO/WOW) and financially supported by the European Commission.

Guenther Trausnitz, EO/WOW President and FCG GPA secretary general, was one of the speakers at the opening of the seminar. The others were WOW board member Adelbert Ewen and Matthias Homey of EZA.

During the workshop the participants exchanged experiences on trade union pluralism in their country. You will be surprised to hear that in a country like Germany the trade union of metalworkers, the biggest, the richest and most powerfull union IGM uses courts to harass and make life difficult to the Christian Metal Workers trade union CGM. The result is that CGM had to use a big part of its membership contributions for paying the costs of these legal proceedings. The IGM accused the CGM not being a real trade union. In Gemany this is a legal question. Without being recognized as a real trade union one cannot sign collective agreements and without collective agreements a trade union risks to lose its reason to exist.

Ms.Isabella Biletta from EUROFOND started the seminar with a bird-eye view on " 'Trade Union Pluralism on European level".

More or less the same happened in Spain, another memberstate of the European Union. For 12 years it was impossible for the Spanish CIC (Confederacion Intersindical de Cajas) to sign collective agreements because the two big Confederations UGT (General Union of Workers) and CCOO (Workers Committees) did not accept the CIC as a partner, while the CIC had enough votes of the workers for being a legal negotiating partner. I was told that the presidency of the European Trade Union Confederation ETUC nowadays is in hands of a member of CCOO (you cannot find confirmation on the ETUC website).

Ms. Anne Kiesow from the Christian Metal Trade Union CGM spoke on "Trade Union Pluralism in Germany".

Even worse is the situation in Denmark. Some time ago about 200 workers of the dominant Confederation LO went on strike in a Carlsberg brewery as a collective protest against one of their collegues because he had chosen to be a member of the Danish Christian trade union confederation KRIFA. Carlsberg fired the worker because it did not want to have problems with LO. In trade union history this is called “deprivation of livelihood”. To make it impossible for trade unions to become active in their company, employers fired workers who were members of a trade union. So today there are unions who use the same weapon against workers who belong to an other union just because they are afraid losing their dominance instead of looking for ways to work together for the benefit of all employees in the company. This is not the only case. It's happened many times before. I wonder what these Carlsberg workers would do if in Denmark only one brand of beer – not Carlsberg – could be sold?

Mr. Wolfgang Pischinger, President of FCG GPA and WOW Board member, spoke about "Pluralism in the Austrian Trade Union work.

However, the worst cases we got from Ukraina from our friends of VOST. In Ukraina the transition to democracy and an open market economy has been slowed down by post-communist forces with the result that Government and employers - many times so-called oligarchs – cooperate together with the aim to create confusion. Employers create their own company unions (so called yellow unions) with our without the help of people from outside the company. The Government recognizes trade unions that exists only on paper. Workers have to become member of the union if they want to keep their job. This is the dark side of pluralism that should be attacked by all democratic forces in Ukraina.

Ms.Dragana Petkovic-Gajic, PhD Political Sciences and Project Manager Confederation of Autonomous Trade Unions of Serbia -CATUS, spoke about "What consequences does Trade Union Pluralism have? Positive and negative aspects of pluralism in South-Eastern Europe.

Another case is Serbia where Western European Banks are buying local banks but do not respect the trade union rights. President Marja Erdelj of the Serbian Union BOFOS informed that for example the French Bank Credit Agricole forced its employees to sign a letter in which they promise not to become a member of a trade union. She hopes to reestablish the rights of the employees during a meeting to which she has been invited by the Management.

Mr. Piet Hazenbosch, Adviser to the board of the Dutch confederation CNV, spoke about "The Dutch case of trade union pluralism".

Fortunately, there are also countries where trade union pluralism has been accepted by all trade unions and where it works reasonably well as for example in Austria, the Netherlands, Cyprus, Malta and post-communist Lithuania. Netherlands has an already long history of trade union pluralism consisting of a social-democratic, christian and liberal-conservative confederation and some national branch unions. Until World War II there was also a Catholic oriented confederation which merged with the social-democratic confederation in the seventies of the past century. All confederations participate in the national social dialogue and all unions are involved in collective agreements.

Mr.Mattheus Homey of EZA spoke on "The importance of Trade Union pluralism from the perspective of EZA".

In Austria, after World War II the Allied Forces together with the forces of Russia forced the trade unions to become one unified confederation called the Austrian Trade Union Confederation ÖGB. Within the ÖGB there are different fractions. The 2 most important fractions are the Socialist fraction FSG ÖGB and the Christian Fraction FCG ÖGB. This system of fractions exists also in the seven branche unions of the ÖGB. In most of these branche unions the Socialist fraction has the majority. In the Branch Trade Union for Private Employed and Print, Journalists and Paper GPA the Christian fraction is a significant minority. In the public services union GÖD, the Christian fraction has the majority.

Mr. Soren Fibiger Olesen, President of KRIFA Denmark, presented his topic " I have a dream that one day all unions can work together to promote the interest of the workers!" 

The seminar topic was introduced by Md. Isabella Biletta, Research Manager of EUROFOND, a tri-partite European Union Agency, that provides knowledge to assist in the development of social and work-related policies. One of the tasks of EUROFOND was to establish criteria for the selection of representative trade unions that could participate in the branch social dialogue commissions of the European Union. She presented also the results of a long term research project that shows that trade union membership continues declining with exceptions in some countries like for example Belgium. It seems that the trade unions don't have yet the right answers to this loss of members. Can it be that the trade unions have become more of an institution than of a social movement? 

The presentation of the results of the working groups. From left to right: Adalbert Ewen (President CMG Germany) as the president of the day, Jolien Dekker from CNV Dienstenbond, Henning Röders from DVV Germany and Jelena Soms from LWU Lithuania.

The participants agreed with the proposal to send a letter to the European Social Economic Committee EESC in which the right of trade union pluralism will be formulated as a fundamental workers right. Workers should have a choice between trade unions free of any discrimination to them as well the trade union to which they belong. In the letter also the cases of the violation of this right on trade union pluralism will be mentioned. The letter will therefore include the cases of violations of trade union pluralism as cited above.

THE STRENGTH OF GERMANY

While cycling through villages and small towns in the Bavarian Black Forest, I realize again how well Angela Merkel Land is organized and how clean it is. Everything is well maintained, the houses, roads, forests, fields and everything else. The prosperity or should I write the wealth splashes off. You wonder why.

Germans are not only hard workers, but also tough, technically inventive and what is called in German gründlich (thoroughly). The car museum in Schramberg is a testimony of this. Immediately after the Second World War, when the country was nearly completely destroyed, the Germans rebuild American jeeps into mobile sawmills that produced the wood for things like for example the famous cuckoo clocks. While the Allied Forces occupying Germany did not allow anymore Messerschmitt to build their dangerous fighter planes, the company switched to the production of small cars. Volkswagen, DKW (later AUDI) and BMW soon followed. NSU motorcycles and mopeds like Zündapp were in the fifties of the last century even popular in the Netherlands.

It is also the land of the craftsman who succeeds in building up a medium or even large company thanks to his inventiveness and creativity, even on the world market. Almost every village or small town has its own industrial park where not only agricultural equipment is repaired. There are also a lot of medium sized companies producing export market products with the latest technology. I see a plant for laser technology in the small village of Aichhalden and one for lightweight rims in Schiltach. The German countryside and its industry are perfectly integrated. The countryside is no longer a farmers business due to the more well-maintained and extended infrastructure of roads where even the cycle tourist is not forgotten. Everywhere there are cycle roads and signs. Also on this field the Germans strive for perfection.

But there's more. Merkel Land is also a stable democracy with a reliable legislation that can be trusted by international investors. This of course supports economic and industrial development together with stable labour relations. Of course there are sometimes labour conflicts. The great and mighty trade union IGMetall occasionally organizes strikes or mass demonstrations but ultimately it is always ready to start a dialogue with employers or the government with the aim to find a compromise. The German consensus model works just as well or perhaps better than the so-called Dutch polder model.

But sometimes I get the creeps of so much perfection. It does not seem healthy to exclude all surprises from life. Life must also be an adventure or we will die of boredom. 

25 MILLION JOBS NEEDED IN THE EUROPEAN UNION

ETUC protesters, Brussels February 2010

How should the economic crisis in Europe be addressed? The classical or conservative road is taken by German prime  minister Merkel.  She insists on a rigorous governmental financial policy with a strict budget control. The budget should not have a deficit bigger than 3%. Government debt should be limited to 60% of the GNP. These strict rules are signed by all EU Governments and laid down in EU legislation. Until now this policy has been fully supported by the Frech president Sakozy and countries like the Netherlands, Finland and Austria. Ireland, Portugal, Spain and Italy are working on it.

But there are also many opponents of this policy, mainly trade unions and leftist political parties. They believe that such a strict budget control destroys the economy resulting in massive unemployment and poverty. The European Trade Union Confederation repeatedly has stressed this point of view. The French socialist and presidential candidate Hollande supports this position of ETUC (the second round between the actual president Sarkozy and Hollande will be on May 6). If Hollande will be elected tensions on future European policy will increase again.

In the meantime the European Commission responded to this criticism  with the publication of a report called “Towards a job-rich recovery”. The report says that “Job creation is one of the EU’s most pressing concerns as it struggles to emerge from the economic crisis. Unemployment has risen to record highs – about 24.5 million people are unemployed, over 10% of the workforce.”

ETUC protesters, Brussels February 2012

The recommendations aim to provide jobseekers with more training and more job opportunities. Those in work would get help acquiring the skills they need to stay up-to-date with changing job requirements. Employers creating new jobs would also receive support. General recommendations include:

-   1. Encouraging job creation through support for businesses, entrepreneurs and self-employed persons, including decent and sustainable wages.

-   2. Targeting key industries where jobs are being generated: the green economy, health and social care sector, digital economy, etc.

-   3. Using existing EU programmes to fund job creation.

-   4. Reforming labour markets to meet future demand

-   5. Developing programmes to encourage lifelong learning and providing young people with training to advance their careers.

-   6. Investing in skills training, anticipating future job requirements removing obstacles to finding a job in another EU country.

-   7. Fine-tuning schemes – including the EURES jobs database – that match jobseekers with jobs across Europe.

-   8. Improving coordination of employment policies across Europe.

-   9. Increasing the involvement of employers' and workers' groups in employment policy making.

However, the ETUC stays very sceptical on these proposals as we can read in the press release of April 18. “The Commission’s proposals will do nothing to help create quality jobs, if the European Union and its member states continue to implement rigid fiscal austerity rules. On the contrary, cutting deficits in the midst of a recession will produce a deeper recession and even higher unemployment rates. Labour market policies cannot compensate for failing macro-economic policies. “

The ETUC believes even less in the proposals for labor market reforms like for example “flexicurity” : “Whilst the model has worked in some Nordic countries, in other parts of Europe it has resulted in increased insecurity for workers.” The ETUC asks for more positive proposals: “strengthening the involvement of social partners in the elaboration of macroeconomic and labour market policy, the role of decent wages in securing job quality and domestic demand, increasing minimum wages to help prevent growing in-work poverty, action to support youth employment and to tackle undeclared work. To replace the ‘governance of austerity’ with the ‘governance of growth and good jobs’, the ETUC urges all European policy makers to advance on these proposals.”