A heated argument about money is imminent. In industry, the collective bargaining parties used the federal government’s proposal and took into account the tax and duty-free inflation premium in the collective bargaining agreements.
The approach of the second largest German trade union is completely different. “We don’t value the premium,” says Verdi chairman Frank Werneke. He is positioning himself before the collective bargaining for the local and federal public sector, which begins on January 24th. Verdi and the civil servants’ association are demanding 10.5 percent more money for around 2.5 million employees.
Werneke rejects the inflation compensation premium of up to 3,000 euros because it would be at the expense of the percentages – that was the case with the corona premium in past wage agreements.
The Verdi chairman speaks of the “most focused demand for public service since human thought” and thus raises the bar.
In fact, the last time there was a similarly high demand was in 1974, when the Public Services, Transport and Traffic Union (ÖTV) demanded 15 percent but at least 185 Deutschmarks for their people. The initial situation then as now: an energy crisis (oil in 1974, gas today) had shot up the inflation rate and caused purchasing power to dwindle.
1,3
billion euro would cost the municipalities a tariff increase of one percent.
“Securing real incomes” has been declared by Werneke as the goal of the 2023 wage dispute, i.e. a wage increase at least as high as the inflation rate. Since inflation is a particular burden on lower-income households, Verdi would like to push through a minimum increase of 500 euros per capita and month.
This is unthinkable for employers: personnel costs would increase by 15 percent if Verdi were to prevail. One percent of the collective bargaining increase accounts for around 1.3 billion euros, so 15 percent would be almost 20 billion euros, which cities and municipalities would have to pay more for wages and salaries.
Around a quarter of the municipalities’ total expenditure goes on staff. At 6.6 percent, the federal government’s share is significantly lower. In the federal states for which collective bargaining is not due again until 2024, personnel costs are a good 30 percent.
We appeal to the trade unions to take into account the difficult situation of municipal employers.
Karin Welge, Employer negotiator
“We are facing a large number of challenges that have not previously been dealt with in such a concentrated manner,” says Karin Welge, who, as President of the Association of Municipal Employers’ Associations (VKA), is leading the negotiations alongside Federal Interior Minister Nancy Faeser. “We appeal to the unions to be moderate and to take the difficult situation of municipal employers appropriately into account.” Welge is mayor of Gelsenkirchen and, like Faeser and Werneke, is a member of the SPD.
The municipalities and their hospitals, the savings banks and other municipal companies are “under enormous financial pressure as a result of the effects of the corona pandemic and the Ukraine war,” argues the VKA.
The employee representatives, in addition to Verdi, the civil servants’ association (dbb) and the teachers’ union (GEW) and police officers (GdP) are also part of the party, would incidentally not take into account the recent past: from 2012 to 2021, the collective wages in the public sector in the Average increase of 2.5 percent/year, but prices only by 1.4 percent. “This results in a real wage increase of almost eleven percent in this period,” notes the VKA. In other words, the employees could also live with a loss in real wages.
Werneke calculates differently: Prices would rise by around 17 percent in 2022 and 2023, but wages only increased by 1.8 percent in 2022. Although the state aid compensates for part of the inflation rate, the unions find the demand for 10.5 percent or 500 euros per capita and month appropriate.
Since the year 2000, the incomes of federal and local employees have risen by 59 percent, but the increase in the economy as a whole was 63 percent and in the metal industry as much as 70 percent. So Werneke complained that there was a need to catch up – also because of the situation on the job market: 360,000 positions in the public sector are vacant. If you add the day-care centers, there are even 530,000 missing, according to Verdi.
“The public service has been driven to wear and tear,” says Werneke. The situation in many areas is “more than dramatic”. Verdi cites a few examples. At the beginning of the 1990s, the public sector employed 6.7 million people, then it went down to 4.5 million (2008).
Since then, the trend has turned, also because there are more tasks, such as looking after children and the elderly. There are now a good 5.1 million employees again. “The greatest danger for democracy, for the cohesion of our community and also for our prosperity is a broken, non-functioning public service,” says Ulrich Silberbach, head of the civil servants’ association.
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“We will not be able to get our demands through at the negotiating table alone,” Verdi chairman Werneke appealed to the willingness of union members to go on warning strikes in hospitals and garbage disposal companies, in savings banks, daycare centers and transport companies. At the largest German garbage disposal service, the Berlin city cleaning service, “a great many have expressed their willingness to go on strike,” Verdi said.
Werneke before re-election
Werneke, in office since 2018, wants to be re-elected for the first time at the federal congress of the service union in September. For a good result, he needs a good collective bargaining agreement. And Werneke will not wrest that from his party friends Welge and Faeser without the support of the street. Before the decisive round of negotiations on March 27, citizens must therefore be prepared for warning strikes and restricted public services.
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