Companies with a collective bargaining agreement are more attractive for employees and skilled workers. This is particularly due to the poorer working conditions in the absence of collective bargaining coverage, such as a new one Study by the Hans Böckler Foundation shows. Full-time employees in companies not subject to collective bargaining agreements work an average of 54 minutes longer per week. In addition, they earn 11 percent less than employees in companies with collective bargaining agreements. This gap in pay makes a difference of several hundred euros between employees at the end of the year.
The study also shows that collective bargaining coverage continues to decline across Germany and across industries. At 52 percent, only a good half of the employees were employed in a collective bargaining company in 2019. For comparison: In 2000 it was 68 percent. Co-determination in companies is also declining. Only 44 percent of employees are represented by works and staff councils.
Countering collective bargaining with strong unions
According to the study, the reasons for the decreasing collective bargaining coverage are, among other things, the economic structural change and the relocation of employees away from large industrial companies to smaller companies in the service sector. This is often an obstacle for trade unions to gain new members, because addressing them directly is more difficult here than in large companies. Employers’ flight from collective bargaining agreements, particularly in industrial companies, also contributed to the collapse of collective bargaining coverage.
According to the Hans Böckler Foundation, strong collective bargaining associations on both the trade union and employers’ side are needed to stop the downward trend in collective bargaining coverage. “In order for collective bargaining to work, we need strong unions as well as employers’ associations that are capable of acting and can set standards for their respective industries,” say the authors of the study. The unions could have strengthened collective bargaining coverage back in the 2010s, and new organizational power should now be created, especially in emerging industries and companies, according to the researchers.
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