Area collective agreements regulate pay and working conditions for entire sectors. Fewer and fewer companies want to be bound by it. DGB and science don’t think that’s a good idea.
Binding to area collective agreements is becoming less and less important in Germany. In 2022, only around 43 percent of employees in western Germany and 33 percent in eastern Germany would have worked in a company with a sectoral collective agreement, the Institute for Labor Market and Occupational Research (IAB) announced on Thursday based on a new study in Nuremberg.
The national average is 41 percent. If you include company wage agreements, the figure is 52 percent in the west and 45 percent in the east. Some of the employers who are not bound by collective bargaining agreements only voluntarily follow the collective bargaining regulations of the respective industry when it comes to payment. After a stable phase in 2020 and 2021, collective bargaining coverage will continue to decline.
Since 1996, the proportion of employment relationships with branch collective agreements in West Germany has fallen by 26 percentage points. In East Germany, the level was lower from the start – but it also fell by 23 points there. The proportion of companies that have a works council is also falling and is now only 40 percent.
It “crumbles a mainstay”
“No one likes this trend,” said DGB board member Stefan Körzell. “Because with the collective bargaining agreement, a mainstay of our social and economic system is crumbling.” The federal government must implement what it promised in the coalition agreement as quickly as possible: “We need a Federal Collective Bargaining Act that obliges future public procurement by the federal government to comply with a collective agreement,” said the trade unionist. Collective bargaining coverage is also important for the economy as a whole: the Treasury lost €18 billion in income tax revenue.
According to the IAB researchers, a works council is particularly beneficial in times of transformation and when there is a shortage of skilled workers. On average, companies with works councils have higher productivity, have less staff turnover and offer higher wages and more working time flexibility – things that are currently considered growth factors in the economy.
Around 15,500 companies are surveyed every year for the IAB company panel.
Source: Stern
