Heil wants to present a package to strengthen collective bargaining

Created: 09/30/2022, 14:21

Federal Minister of Labor Hubertus Heil (centre) with a flower arrangement at the minimum wage when visiting a garden center in Berlin.

© Annette Riedl/dpa

Most employees in Germany do not benefit from collective agreements - it was different just a few years ago.

Now the erosion of the collective bargaining agreement is to be stopped.

Berlin - Federal Minister of Labor Hubertus Heil (SPD) wants to stop the increasing decline in collective bargaining coverage in Germany with a new law next year.

"We will work to ensure that there is a collective bargaining package that is to be decided next year," Heil told the German Press Agency in Berlin on Friday.

Before the increase in the statutory minimum wage to 12 euros this Saturday, Heil said: "It is right and good that we have now raised the minimum wage significantly, as important as it is to ensure that there are more decent wages above the minimum wage again Collectively agreed wages exist.” The federal government will ensure, for example, that public contracts from the federal government will only go to companies that pay according to collective agreements, Heil affirmed.

More workers should also have decent wages above the minimum wage "so that people can live from their work, so that there is more respect for hard work".

Less collective bargaining coverage in the East

According to the latest figures from the Federal Statistical Office, the employment relationship is regulated by a collective agreement for only around 44 percent of employees in Germany.

In the old federal states, there are 46 percent with branch collective agreements and 7 percent with company collective agreements.

In eastern Germany, 34 percent work under sectoral collective agreements and 11 percent under company collective agreements.

For 47 percent of the employees in the west and 55 percent in the east there was no collective agreement today.

In 1998, 76 percent of employees in western Germany still had a collective agreement, and 63 percent in eastern Germany.

When asked whether the minimum wage increase will fizzle out in the face of rising energy prices and the cost of living, Heil said: "No, that's not the case." For most people who benefit from it, the increase is the largest wage increase in their lives - "measured on last year by 22 percent”.

Measured against the most recent minimum wage increase on July 1 to 10.45 euros, it is still 15 percent.

"Well, thank God it's above the inflation rate, but inflation still eats up a lot of purchasing power, especially for low earners."

Heil rated the government's decision of the previous day for a "defence shield" of up to 200 billion euros to protect people and companies from the price hikes in energy as an "important signal".

Both are important: “Wages must rise appropriately, and the minimum wage is a big boost for 6.6 million people in total.

And at the same time we have to relieve the burden in order to keep this country socially cohesive in these times.” dpa