Only every second employee benefits from the collective agreement – economy

Not much has changed at first – yet, says Serdar Üyüklüer. Wüsthof, a manufacturer of high-quality knives, withdrew from the collective agreement two years ago. Since then, collective wages have continued to be paid, says the managing director of IG Metall Remscheid-Solingen, but the employees have a right to it, but only according to the old collective agreement that applied when they left. Üyüklüer says that negotiations are still under way with Wüsthof as to whether the new collective agreement from last fall, with a total of 8.5 percent more money and inflation compensation premiums of 3,000 euros, will be adopted. The workforce is now “split”. Some would have guaranteed wages in their employment contracts, others not. And the company offers the inflation bonus to those who sign a new employment contract.

In his district alone, Üyüklüer counts 20 of around 200 companies that have terminated their commitment to the collective agreement in recent years. The Federal Statistical Office presented new figures on Friday: Only just under half of the employees in Germany, almost 49 percent, were still working in a company bound by collective agreements in 2022. The Nuremberg Institute for Labor Market and Occupational Research (IAB) has been finding a decline in collective bargaining coverage for years. According to your data, which are determined on a different basis, the proportion of employees in collective agreements fell from 67 percent in 1996 to 43 percent in the year before last. According to the IAB, a trend reversal is not to be expected.

The development seems unstoppable and elusive, even experts find it difficult to explain it. Because both employees and companies benefit from the collective bargaining agreement. “For companies, collective agreements have the great advantage that they have peace of mind on the wage front and the negotiation effort is less than with individual contracts,” says Claus Schnabel, economist and professor at the University of Erlangen-Nuremberg. However, for many companies, a collective agreement is too rigid and does not suit their needs. “They prefer to be flexible,” says Schnabel.

Young companies are less willing to work on the basis of collective agreements

The change in the economy away from industry and manufacturing towards services is considered to be an important factor for the disappearance of collectively agreed jobs. While trade unions in industrial companies can approach thousands of workers relatively easily and organize strikes, it is more difficult, for example, in dozens of physiotherapy practices scattered across the city. Outsourcing also plays an important role, says Steffen Müller from the Leibniz Institute for Economic Research in Halle (IWH). “Many large companies have been outsourcing services such as cleaning, security and running the canteen for years.” These companies are no longer bound by collective agreements.

Added to this is the trend that young companies are less willing to work on the basis of collective agreements than existing ones. Start-up entrepreneurs and their employees in particular sometimes consider collective agreements and works councils to be superfluous or “uncool”, at least as long as business is good and the pay is good anyway.

What are the consequences for employees? Noticeable disadvantages, according to the Economic and Social Science Institute of the Hans Böckler Foundation, which is close to the union. She presented a study in mid-April. According to this, full-time employees in companies without a collective agreement work an average of 54 minutes longer per week and still earn around eleven percent less than employees in comparable companies with a collective agreement.

IWH expert Müller sees things differently. Companies bound by collective bargaining pay higher wages, but they are also “different,” says the professor. “The main reason for the higher earnings is not the collective agreement, but the higher qualifications of the employees and their ability to pay better.” No tariff does not automatically mean lower pay, says Müller. “Almost a third of the companies without a collective agreement are based on the collective agreement.”

Just like the Solingen knife manufacturer Wüsthof – at least for the time being. IG Metall man Üyüklüer fears that employees will only be offered the wage increases of the new collective agreement “on occasion”. At first it’s just a few percentages. “But that quickly adds up to 30 percent less wages over the years.” In addition: A company agreement makes it possible to agree on even worse conditions than the old collective agreement. When asked on Friday, Wüsthof did not comment on his actions.

“People are afraid of losing their jobs in the difficult economic situation”

The traffic light coalition has set itself the goal of strengthening collective bargaining coverage. Minister of Labor Hubertus Heil (SPD) recently presented a draft law according to which federal contracts should only be awarded to companies that pay according to collective bargaining agreements. Steffen Müller from the IWH would even go beyond Heil’s draft. Government contracts should not only be linked to standard wages, “but also to the existence of a works council,” he says. In companies with a works council, the working conditions and productivity are better, a collective agreement alone does not guarantee that. Labor market expert Schnabel, on the other hand, does not believe in additional state intervention. “Employers and unions should get a higher collective bargaining agreement themselves,” he says.

In the case of Wüsthof, this would mean that IG Metall would now have to put pressure on, possibly threatening a strike, in order to oblige the company to sign collective agreements again. “But people say we’re not at a disadvantage at the moment. And they’re afraid of losing their jobs in the difficult economic situation,” says Üyüklüer. The situation is “absolutely unsatisfactory”.

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