[By Dimphy Smeets] – For a number of years, ‘precarisation’ has been a hot issue for the German union movement. The term appears in German newspapers almost daily. It refers to exploitation and growing poverty among workers as a result of measures taken over the past ten years to make the labour market more flexible. In order to counter this development, German unions are now fighting for a national legal minimum wage of 8.50 euros.
For Germany lacks a general minimum wage. Partly because powerful unions like IG Metall have blocked this for years. They thought a general minimum wage would increase wage costs, which might induce employers to lower wages. Germany is now one of 7 (out of 27) EU countries without a legal minimum wage.
As a result, German unions need to negotiate minimum wages per sector or group as part of the collective agreement. Where such agreements are not in place, hourly wages of 4 or 5 euros are no exception. And that is within the law. In addition, the German Bundesminister für Arbeit und Sozialordnung seldomly extends collective agreements to the entire sector (1.5% of all collective agreements in 2008).
However, employers are massively searching for legal ways to exempt entire groups of workers from the collective agreement. Means to achieve this include constructions similar to payrolling (‘Werkverträge’), outsourcing entire production chains to make sure the company agreement does not apply. Or by hiring unemployed workers multiple times as trainees who receive no wage but only their unemployment benefit (Amazon).
Ironically, it was the red-green (SPD and Greens) Schröder government which gave birth to precarisation with its Agenda 2010 in the early 2000s. The Agenda 2010 included tax reductions for businesses, social security and benefit cuts (Hartz IV legislation) and, last but not least, measures to make the labour market more flexible.
With the best intentions: the German labour market, with its emphasis on employment protection and permanent jobs, had become rather rigid. It was almost impossible to hire workers on a temporary basis and wages were relatively high. With massive unemployment in the East after the Wiedervereinigung, up to 25%, something had to be done to make the labour market more flexible and the German economy more competitive, it was thought.
Chancellor and SPD leader Schröder was not perceived as a friend of the unions to begin with. His Agenda 2010 had angered the unions. Untill then, the German union movement – although in name a unitary movement that also is a home to the Christian Democrats – had had close ties to the Social Democrats. The neo-liberal course adopted by the SPD in its Agenda 2010 (inspired by Tony Blair’s ‘Third Way’) caused the two groups to drift apart.
Thanks in part to its low wages, Germany is once again the largest and most powerful economy of Europe. The unions have long supported wage moderation, albeit grudgeingly. Because of the two decades of economic slump after the fall of the wall, they sometimes had no other choice. But when the German economy finally recovered last year, there was a loud call for ending Germany’s position of a ‘Niedriglohnland’ (low-wage country).
Only recently have the SPD and the unions started to make overtures to each other once again. The SPD, now an opposition party, shares the view of Michael Sommer – the chairman of the German union federation DGB – that ‘to some degree, labour has become cheap as dirt in Germany’, as Sommer put it. This raises hope among the union movement that a future government, with the SPD, will introduce a legal minimum wage. Under the current government of the centre-right FDP and the christian-democrat CDU/CSU this will probably not happen.
Meanwhile, the government did introduce a minimum wage for agency workers. According to minister Ursula von der Leyen, this will create a minimum wage of 7,01 euros in Eastern and 7,89 euros in Western Germany for 4 million wokers in eleven sectors (so the difference between East and West still applies).
Currently, unions in Germany are unable to take a stand against the employers on their own, without political support. The union density of 20 percent is deceptive, as it depends on sectors where unions traditionally have a strong position, such as the metal sector. Like in the Netherlands, unions are trying to reach out to workers at the lower end of the labour market through organising. However, the holy grail of union renewal has yet to be found.
Dimphy Smeets is a web editor at FNV Bondgenoten. At the Freie Universität in Berlin, she studied union renewal and the economic crisis (2010-2011).