This article is adapted from the business magazine Capital and is available here for ten days. Afterwards it will only be available to read at www.capital.de. Like stern, Capital belongs to RTL Deutschland.
Germany is in a strike mood: The train drivers of Deutsche Bahn have gone on a 35-hour strike, the Lufthansa ground staff are also rehearsing the strike, as are the security staff at Frankfurt and Hamburg airports. The Lufthansa flight attendants will soon also want to follow the UFO union. Travelers can hardly get away on Thursday and Friday and if they do, then only at exorbitant prices through alternative providers such as Flixtrain or rental car companies. Is all of this justified – and are the strikers’ demands reasonable?
In both cases – Deutsche Bahn and Lufthansa – the core issue is demands for 12.5 percent more wages. Both the German Locomotive Drivers’ Union (GDL) and Verdi want to enforce this increase and a few other points for their employees.
Given last year’s collective bargaining agreements, this house number appears to correspond to the new normal. The railway workers’ union EVG achieved an average wage increase of 14.5 percent, and at Deutsche Post it was an increase of 15 percent. An agreement was reached for 5.5 percent more money in the iron and steel industry.
In general, the unions of the German Trade Union Confederation DGB – which includes Verdi and IG Metall as well as EVG – concluded new collective agreements for around 6.3 million employees. In addition, wage increases from previous collective agreements came into force in 2023 for a further 9.2 million employees. There were also one-off payments and fixed amount increases reflected in the table.
An important justification from the employees’ side was always that earnings had significantly lost value due to inflation and that real and nominal wages had clearly diverged. But really that much?
If you look at the wage development of the past few years, the hefty demands for a 12.5 percent increase in wages appear to be partially justified, but a clear assessment is difficult:
It was only last year that real wages rose again for the first time since 2019, albeit only by 0.1 percent. This is stated by the Federal Statistical Office. Previously, short-time work and inflation had completely slowed down wage increases, and now inflation is still eating up most of the average wage increase: including special payments, the nominal wage index rose by six percent in 2023 compared to the previous year, the highest since 2008. But consumer prices were also higher: at 5.9 percent.
The Economic and Social Sciences Institute (WSI) of the trade union-affiliated Hans Böckler Foundation estimates a decline of 0.4 percent for real wages agreed in collective agreements without taking inflation compensation premiums into account. However, the inflation premiums have probably still led to a slightly positive trend for many people. For example, with the railway EVG agreement they were around 2,850 euros and with the post office they were a one-off payment of 1,500 euros plus ten further payments of 150 euros.
“It is an important step that the purchasing power of collective bargaining employees could be largely secured on average in 2023,” says Thorsten Schulten, head of the WSI collective bargaining archive. “However, in order to be able to compensate for the massive real wage losses of the two previous years, significant real wage increases are necessary in the coming collective bargaining rounds.”
After a continuous increase in real wages in the 2010s, the average wages of collective bargaining employees in 2020, adjusted for prices, were 21 percent higher than in 2000, the WSI calculates. In 2021 and 2022, the real collective wages fell again by six percentage points due to the price shocks, so that they are now only at the level of 2016. When asked, the WSI said whether a demand for a 12.5 percent increase in wages was appropriate or not could not be said scientifically.
Most recently, collective bargaining wages have risen between 4.4 and 7.4 percent compared to the previous year and, in general, tariffs have only gone up over the past twenty years. Deutsche Bahn even states that salaries within the scope of the GDL collective agreements have increased by 21 percent since 2014. However, until a few years ago inflation was never as high as it was recently. In 2016, for example, at the level at which current wages are according to the WSI, inflation was only 0.5 percent compared to the previous year. In the summer of 2023 it was over six percent.
These food and energy price increases tend to hit low-income households the hardest. Professions in low-wage sectors have recently benefited above average from the tariff increases, especially in light of the increase in the statutory minimum wage from 9.19 euros in 2019 to 12 euros. Wages rose the most, at ten percent, in agriculture and 9.5 percent in the hospitality industry.
Low wage groups are particularly advantaged by flat-rate inflation compensation bonuses – even if these one-off payments would dampen wage development in the long term, writes the WSI. “On the other hand, in many collective agreements, percentage wage increases were combined with fixed minimum amounts, from which employees with low incomes also particularly benefit,” it continues.
Train drivers’ salaries are just below the German average of around 56,000 euros in gross earnings per year. According to the Federal Statistical Office, skilled workers in postal and delivery services earn a good 20 percent less than skilled workers in the economy as a whole. At the top of the table are pilots with annual earnings of just under 130,000 euros.
In its analysis of the earnings of full-time employees, the Federal Statistical Office also found: The fifth with the lowest earnings recorded the largest increase in 2023 at 11.4 percent nominally, the middle fifth achieved 5.8 percent and the top fifth only 4, 6 percent – for high and middle incomes, there is no plus left after deducting inflation from 2023, for example for pilots and train drivers.
The GDL last concluded a collective agreement with Deutsche Bahn in 2021 with a term of 32 months. She negotiated an increase of 3.3 percent in two stages. In addition, all employees received Corona allowance.
In their negotiations, unions like Verdi want to make sure that there is actually something left over from the wage increase at the end. In response to Capital’s inquiry, Verdi therefore refers to the so-called distribution-neutral scope, which must at least be exhausted in a new collective agreement. Productivity and quality development are added together “in order to ensure that employees not only receive real wage compensation, but also their constant share of national income.”
In 2021 and 2022, the pay increases necessary according to this distribution policy requirement were only partially implemented, so that the distribution situation for employees worsened. There is now a need to catch up for the coming collective bargaining rounds.
The retail sector, among others, is currently in negotiations. The employer has an offer on the table for, among other things, an increase of six and later a further four percent. But that means a loss of real wages for the employees and is therefore “not possible to conclude,” says Verdi.
According to the WSI, the year 2024 will be a “heavyweight” in purely quantitative terms, as collective wage agreements for twelve million employees are expiring, including in the metal and electrical industries, the chemical industry and at Deutsche Telekom. The last regular wage agreements took place in times before high inflation. Collective bargaining expert Schulten expects an “offensive collective bargaining round” and also further strikes in 2024.
