Millions Left Behind in Boom The High Cost of Germany's Economic Success


Part 3: Pitting Workers against Workers

Since the situation is so precarious in the lower wage groups, Ver.di Chairman Bsirske has been set on establishing a "social component." Berthold Huber, the chairman of IG Metall, also wants to fight for more than higher pay in the current wage dispute. In a SPIEGEL interview in early March, when the talks were just starting, he said that IG Metall "isn't just a moneymaking machine." In the past, this would have been an outrageous statement for a chairman of IG Metall given the decades his union has spent serving its core clientele.

But now the union is also addressing the needs of the less established workers and trying to help them gain a foothold. The union has already convinced more than 1,200 companies to pay temporary workers the same wage negotiated for IG Metall members. In the current collective bargaining round, it also wants employers to include members of the works council in decisions on the extent to which temp workers are used. And, lastly, the workers' organization is currently trying to convince the temporary-employment industry to require companies to pay extra wages to workers when they are used in the metal and electronics industries.

The union's aim in this is to make temporary work so unattractive to companies that they might consider employing temp workers on regular terms. It also wants to prevent any further shrinkage of the core workforce.

Niche Unions' Threats to Solidarity

But the big unions are caught in a dilemma. When making their wage demands -- and especially when signing collective bargaining agreements -- they have always had to make allowances for industries and companies that are not as profitable as others. This sort of compromise requires solidarity from all parties involved. But, these days, not all professional groups are willing to compromise. In fact, they want more, and new labor unions are stepping in to fill the vacuum.

The official establishment is terrified by people like Dirk Vogelsang. The 55-year-old lawyer in the northern city-state of Bremen is the strategic mind behind several niche trade unions, which only represent the members of specific professions within a company, such as pilots and train drivers.

The separatists have had many successes in recent years with their focus on the few, sometimes securing significant pay increases for their clientele. Members of these mini-unions seem to enjoy a constant upswing no matter how the economy is doing.

Vogelsang benefits from the weakness of the big unions and dissects their crisis with relish. He simply turns around the charge that his niche unions lack solidarity. "Most trade unions adhere to the notion, influenced by a rush to obedience, that only a fixed wage bill is negotiable in collective bargaining rounds."

"It isn't that some employees are fighting against other employees," he continues. "We're all fighting against the employers, and we want to take away as much possible from this opponent."

Still, Vogelsand won't go so far as to say it's best to pursue the principle of every professional group for itself and no one for all. Instead, he says that niche unions will remain the exception because very few employees pose as much of a potential threat as pilots and train drivers.

In other words, the powerful will prevail and receive even more compensation in good times, while the replaceable will have to settle for less even during economic booms.

"So far, niche unions have arisen mainly in places where competition is weak," says Justus Haucap, an economist at Düsseldorf's Heinrich Heine University and head of Germany's Monopolies Commission, which advises the government in Berlin on competition policy. Like Vogelsang, he sees a trend toward mini-unions representing professional groups that cannot be replaced by other employees within a company. He also believes that, when push comes to shove, the negotiating power of the few specialists is greater than that of the larger group.

But, unlike Vogelsang, Haucap is convinced that the wage pie wouldn't get any bigger if more unions fight for their share of it but, rather, that the pieces will only get smaller. "The distribution battle is no longer being fought just between capital and labor," he says, "but also among the employees themselves."

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tnt_ynot 05/04/2012
1. Tunnel vision
The rest of Europe is going to hell and the FAZ sees Germany as leaving people behind. Here is what I call leaving people behind: Unemployment Spain 24% tendency rising Greece 18% " Ireland 14% " France 10% " Germany 7% tendency stable to declining Taking a look at the other countrys" youth unemployment levels will make a grown man cry. Germany's makes you wonder what good planet you are on The most important goals for Germany has been to remain competitive, throttle debt, squash unemployment and if possible hold Europe together. That is being accomplished at levels not seen for decades. It is the other parts of the EU that are not only leaving their citizens behind but also ruining their future. Anthony
KhanZubair 05/06/2012
Very true it is. Each day adding to miseries of salaried and jobless people. If some one can meet both ends feels happy to live on. Enjoyment or some extra spending seems to be stories of the past. How long it will continue is doubtful. limits of patience also have borders. Hope those who matter can perceive it.
Inglenda2 05/07/2012
3. What could be saved without injustice
There are many ways in which the extreme differences between lower and higher income groups could be placed on a fairer basis. Some are so simple that they are completely overseen. The biggest problem however, is that those members of the community, who are in a position to change the situation, are the very beneficiaries of the unjust structural systems within society. The trade unions too, are also not free from causing a widening between the smallest and excessive earnings. To claim a percentage increase in income for workers, rather than one with fixed rates, automatically provides the better paid employees with a greater financial rise than their low paid colleagues. While it can be observed, that the majority of retired persons have suffered a 20% loss of buying power over the last 10 years, there are some, who have a net income which is still much higher than the gross wage of many full time workers. Can it really be just for country to pay one person more for doing nothing, than another receives for working all day? Of course the older people of today - some started work at 14 years of age and worked until they were 65 – cannot be compared with newer generations, of whom a number are still studying at the age of 34 and cannot therefore ever play a responsible part in financing future pensions.. There would however be the possibility of capping the state paid rate of pension to the level of an average workers income. The surplus therewith created then being shared among lower rated pensioners without undue burden on younger tax-payers. Such changes are unlikely to happen of course, especially in a society in which egoisms is part of education, but in theory the possibility is given.
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