Collective wages are falling for the second year in a row. In 2021, tariffs had risen by an average of 1.7 percent and prices by 3.1 percent. The purchasing power of employees who are paid according to collective agreements thus shrank by 1.4 percent. This year, real incomes will fall by as much as 3.6 percent – at least. The Economic and Social Science Institute of the trade union Böckler Foundation has determined the data for the first half of the year: The wages rose by 2.9 percent, but because of the high price increase of 6.5 percent, the employees had a real 3.6 percent less income . Purchasing power will shrink even more in the second half of the year, as the inflation rate is now at 7.5 percent and is expected to rise to ten percent in the coming months. The fuel discount and the new euro ticket will expire, and from October the new levies alone will make gas around 30 percent more expensive.
In the first half of the year, wage increases that were fixed in 2021 or earlier in wage agreements with a term of several years came into effect for almost eleven million employees. This also includes large areas such as public service or retail. “These older deals were agreed at a time when inflation rates were still expected to be significantly lower. Accordingly, these agreements will result in a wage increase of just 2.5 percent for 2022,” writes the WSI.
In view of the inflation rates that had risen significantly in the course of the Ukraine war, “a trend towards higher wage increases was discernible” in early summer. In the steel industry, which is benefiting from high prices, IG Metall pushed through an increase of 6.5 percent. That was the highest degree in 30 years. On average, this year’s tariff increases are 4.5 percent. “Since the total number of employees affected by the new collective bargaining agreements is relatively small at just over three million, together with the older collective bargaining agreements for 2022 there will be a total collective bargaining increase of 2.9 percent,” writes the WSI. Only half of the employees will benefit from the increases, since the majority now work in companies that do not use collective agreements. There are significantly more in the east than in the west.
Due to the shortage of workers and the forthcoming increase in the statutory minimum wage to twelve euros on October 1, there were some special wage agreements in low-wage areas. These included the hotel and catering trade, the building cleaning trade and temporary work with double-digit growth. Employees can even look forward to rising real wages here. “These collective bargaining sectors are reacting to the increasing shortage of labor and skilled workers with extraordinarily high wage increases,” writes WSI collective bargaining expert Thorsten Schulten. The starting wage for building cleaning staff rose in October from 11.55 to 13 euros, which corresponds to an increase of 12.6 percent. In the hospitality industry, the NGG union pushed through increases of up to 27 percent, in increments over a two-year period.
Since lower incomes in particular would be increased because of the minimum wage, this proves to be “contrary to some criticism from the employers’ associations as an important instrument for strengthening collective bargaining relations”. The Confederation of Employers’ Associations has rejected the increase in the minimum wage as an interference with collective bargaining autonomy. The statutory minimum wage was introduced in 2015 at a level of EUR 8.50 and is currently EUR 10.45.
The 2022 collective bargaining round will be completed in the second half of the year by a series of further collective bargaining negotiations that can still shift the collective bargaining balance for the year. This includes sectors in which no negotiation result has yet been reached (such as seaports) or in which negotiations were interrupted in spring 2022 in order to continue them in autumn (chemical industry). The most important are the collective bargaining for almost four million employees in the metal industry, which will begin in September and for which IG Metall is demanding eight percent. At the end of the year, collective bargaining for the public sector (municipal and federal) begins. After a poor Corona conclusion in 2020 with 1.4 percent in 2021 and 1.8 percent in 2022, Verdi wants to push through significantly more this time for the 2.3 million employees, 2.1 million of them in the municipalities.
The pandemic shaped the collective bargaining disputes in 2020 and 2021, in this year and the next it will be the war and the consequences of the war. “In view of the completely uncertain development of the Ukraine war and its economic consequences, collective bargaining is unable to compensate for the employees’ loss of purchasing power. Additional relief measures by the state are necessary here,” said Schulten. At the same time, the WSI scientist criticized the appeals to the trade unions to exercise moderation: “A sober look at the collective bargaining data shows that the much-cited wage-price spiral is a mirage. On the contrary, there is a risk that real wage losses will further weaken private demand and thus further damage economic development.”