MORE ABOUT GERMAN MINI JOBS

Below you find a reaction on the earlier published blog on German Mini Blogs (July 12 2013), written by Adalbert Ewen, President of the German Metal Union CGM affliated to the German Christian Confederation CGB. The CGM is affliated to the World Organization of Wokers WOW.

At the beginning of the new millennium, Germany was considered "the sick nation of Europe". How could it therefore be possible to reverse this situation and to grant Germany a role model– whether rightly or wrongly?

In the years from 2001 onwards, the Schröder government underlined the importance of national and international labor market reforms, particularly the so-called "Hartz reforms" of the years 2003 to 2005. The federal government applied the so-called flexicurity, that is, demanding a stronger activation of jobseekers, by fully deregulating the legal basis of individual forms of atypical employment opportunities. Thus, the creation of minor employment was considered the alternative to unemployment, especially in the expanding service sector. Nevertheless, during high times of the new economy, one resisted the temptation to expand this sector further, especially in the financial sector. Instead, all Länder-governments wanted to maintain and further strengthen the industrial 'Germany', including special support for the middle class with a total of 1,400 companies, belonging to the world market leaders. Here, the relationship between trade unions and employers has played a major role. The social partners established security of employment as a major element, which has been crucial for the German success and for our competitiveness.

Therefore, the importance of labor market reforms is often oversubscribed. Very flexible labor agreements with the trade unions contributed to strengthen the equity base of the companies and to increase profitability. Therefore, even at the peak of the financial crisis in 2009, closure of a larger number of companies could be avoided, among others due to short-time working.

Nevertheless, there is a correlation between high growth rate and income inequality. In Germany, thanks to reforms, unemployment has been reduced from five to three million. The appropriate wage policy secured many well-paying jobs in the industry. Therefore, Germany has a higher share of industrial employment than France or England, for example. Moreover, Germany presents a high trade surplus, because a large part of industrial productions goes into the world market.

The beginning of the millennium showed a real wage loss, but from 2005 onwards, trade unions increasingly managed to reverse this trend. The only problem left over, in fact, was the greatly increased number (more than 7 million) of atypical employments (mini-jobs, part-time and temporary work). As much as these jobs contributed to more flexibility on one hand, on the other, they also led to significant revenue losses for the social security institutions, and they will lead to increasing poverty among the elderly, especially women, whose average pension is already significantly below that of men.

So-called "mini-jobber" are not insured against unemployment and not affiliated to the statutory pension insurance of self employed. The latter has recently been made possible – though quite inadequately. Mini-jobs put increasingly tariff rates (rates established in collective agreements) under pressure, because since ten years, the former limitation to a maximum allowable working time has been dropped (crowding out effect of regular employment).

Conclusions:

• Unemployed people bear the greatest risk of poverty. About 56 percent of them are at risk of living in poverty (poor people perceive less than 60 percent of average earnings in Germany).
• Nearly 59 percent of the poverty threatened is able to escape poverty by means of a low-wage job.
• According to my union, this mini-jobber need better legal requirements, most notably the elimination or significant reduction of the minimum threshold of compulsory social security.

While maintaining a minimum threshold, the (re)introduction of a limit for allowable working time in hours (previously 15 hours per week) is essential, in order to allow an hourly wage corresponding to a minimum wage of 8.50 € for a monthly salary up to 450 € - as requested by the unions.

Adalbert Ewen

CGM-Bundesvorsitzender

23/07/2013

WHY UNIONS LOSE POWER IN CENTRAL AND EASTERN EUROPE

Profesor Milan Katuninec during his speech at the WOW seminar on the Social Dialogue in Europe

Profesor Milan Katuninec of the Slowakian Trnva Univeristy spoke on the WOW seminar on the social dialogue in Europe. We have the pleasure to publish here the first of three important partis of his speech that can be useful for trade unions elsewhere in the world.

"Despite different developments of trade unionism, we all agree that the trade union movement must be an important part of civil society. But from 1989 there has been a widespread decline in the trade union membership in all central and east European countries. Poland has a level of union density of less than 15%, Hungary 16,8%, Czech Republic and Slovakia 17%, Bulgaria about 20%, and only in Romania is the density with 33% above the EU average.There have been many attempts to explain this negative trend and I know that we have no time to deal with them in detail. I will mention briefly only some of them.

One reason for this is a large structural change in the industrial breakup of enterprises that have not been competitive in new market conditions, the privatization of enterprises and new companies with transnational capital. During the period of reckless privatization, there was a weakening of the position of the trade union movement in many enterprises, the basic social rights of employees were ignored, and the market economy was reflected in the uncompromising assertiveness of the unrestrained capitalism. Most of employees who remain today in the trade union organizations are working for former state-owned companies.  People, who have been sacked and have experienced unemployment, are less likely to join again a trade union after finding a new job, because they have lost trust in the trade union movement. 

In Central and Eastern Europe as well as in many west European countries where the unemployment grows, trade unions are losing their power. We can see in our countries a failure of active social policy, which emphasizes prevention of social problems by taking action „ex ante“.  There is a growing number of young people in Central and Eastern Europe without any work habits, without having to learn that nothing is free.

There are 35.6 % young people in Slovak Republic unemployment and many of them are loosing active interest in work. They are without personal responsibility and roam the streets. This people, without acceptation that the borrowed money should have to be paid back, are living on state support without any hope for better future. In an unhealthy environment the importance of future and the strategy focused on goals of serving the common good is often underestimated, and the attention goes to the negotiations for solving of accumulated problems.  In such an environment we can not wonder that the view of young people on the social policy is significantly different from the view of the older generation, for whom unemployment is a huge shock. But there also are different views among young people."

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.”