Compromise Between Unions and Employers Averts Strike
January 11, 2003
Strike fears were soothed on Thursday evening in Potsdam when Interior Minister Otto Schily announced that a compromise had been reached with trade union leaders on pay increases for German public sector workers after three days of talks. The unions, representing three million firefighters, nurses, garbage collectors and other public servants, had threatened to take industrial action which would have caused havoc across the country.
Referring to Germany’s current economic crisis, Schily declared that the agreement had avoided a strike “that wouldn’t have fit in the economic situation.” Frank Bsirske, head of Verdi, Europe’s largest union, conceded that the negotiating parties had “stood on the threshold of a strike, that appears to have now been averted.”
Pay raises
The deal, which both sides are expected to formally approve on Friday, calls for 4.4 percent wages increases in three steps. The first pay raise of 2.4 percent will be effective as of January 2003 for lower and mid-range wage earners.
Public servants in former communist eastern Germany can look forward to receiving the same wages as their colleagues in western Germany by 2009. They currently earn 90 percent of western public servants’ salaries.
In return, public sectors workers will be required to sacrifice one free day a year. Furthermore, pay increases based on age, which are the rule in the sector, will be reduced by half for a year and pay days will be moved from mid-month to the end of the month.
The tariff agreement will be valid until January 31, 2005.
Criticism from local authorities
However, officials from Germany’s states and local authorities have criticized the agreement as being too generous.
Rhineland-Palatinate’s finance minister, Gernot Mittler, said that the result of the negotiations would be hard on public budgets in a radio interview on Friday. “This is certainly not a contribution to retaining jobs in the public sector”.
The German Association of Municipalities announced that the tariff agreement would mean higher personnel costs of nearly 2 percent for the current year. Gerd Landsberg, managing director of the association, said on German radio that the central government must help out the local authorities many of which are also grappling with severe financial difficulties.
Saxony-Anhalt’s Premier Wolfgang Böhmer said the eastern German states had been treated unfairly. His finance minister, Karl-Heinz Paque, declared that the negotiators hadn’t taken into account the “extremely difficult financial situation” in Saxony-Anhalt.
Fewer jobs
The German Institute for Economic Research (DIW), a Berlin-based think tank, described the tariff agreement as positive. DIW President Klaus Zimmermann, however, said that the wage increases were “clearly one percentage point too much” and would present great difficulties to the central government and local authorities. Zimmermann maintained that an increase taking inflation into account would have been more appropriate. In an interview with the Berliner Zeitung newspaper Zimmermann said that the agreement could lead to fewer jobs.