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ORIGINAL FRENCH ARTICLE: L’appauvrissement des salariés allemands

by Bruno Odent

German Workers are being made Poorer

Translated by Ann Drummond

Translated Friday 14 July 2006, by Ann Drummond

Successive German governments and employers have taken full advantage of the absence of a minimum wage to lower real wages to an extent unprecedented in Europe.

The complete absence of national regulation in Germany on the minimum wage has been a prime contributory factor to the pressure on spending power there, which has affected everyone in Europe to varying degrees in the past few years, and has taken extremely dramatic forms much further afield. Official research itself reveals that since the middle of the 1990s, real wages have thus directly declined by an average of 0.1 to 1%, depending on job type, which is unique in Europe.

More often than not, the absence of any regulation is justified by "free bargaining" between the social partners (trade union and employer), one of the key principles of the German system which is held up as an example - the "social market economy". Admittedly, at a time when the unions were strong enough and unemployment had been brought down considerably, the results achieved in sector level negotiations proved on the whole to be satisfactory. So for three "Golden Decades", German employees appeared, from afar, to be among the best paid in Europe.

For the past twenty years or so, the terrible havoc wreaked by successive governments, obsessed with bringing down salary costs, has changed all this. All the more so since this has coincided with an all too noticeable weakening in the unions - the DGB (German trade union federation) has lost nearly half of its members in this period. As a result, the sector tariff agreements have gradually been by-passed, rendered meaningless. The exemption clauses recommended by government in the name of so-called "employment pacts" have become so widespread that employees with fewer qualifications, and through a knock-on effect, everyone else, are increasingly being blackmailed by employers. Witness the success of Siemens and Daimler-Chrysler managements in negotiating wage cuts with their union "partners" or lengthening the working week (without any compensation) for some of their production sites.

The German state has also taken a direct role in social dumping with the introduction of jobs at one euro per hour, supposedly to give a leg-up to the long-term unemployed. The Left Party.PDS (1) has been the only one to consistently take a stand to stop this headlong rush into wages based on the lowest bid. It is the only organization which is now advocating the introduction of a French-style guaranteed minimum wage for all employees, giving them at least 8 euros an hour.

The face of Germany has been changed by the onset of this downward spiral in wages, with poverty, also among those in work, becoming a large-scale phenomenon. All of which has a detrimental effect on an economic recovery which is based solely on exports, while domestic consumption continues to decline on a quarterly basis.

Bruno Odent.

Translator’s note:
(1) Die Linkspartei.PDS is the successor to the former East German ruling party, the SED (Socialist Unity Party). In 1990, the SED became the Partei des Demokratischen Sozialismus, (PDS) which was then renamed in 2005 as Die Linkspartei.PDS.

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