Union demands statutory minimum wage

27 November 1999
Thorsten Schulten
Germany
In contrast to many other European countries, there is no statutory minimum wage in Germany. Companies which are covered by a collective agreement have de facto a collectively agreed minimum wage, while in other companies there is no regulation of minimum wages. In only a very few sectors has the Ministry of Labour extended collective agreements to make them generally binding [1] on the whole sector. A recent example of the latter can be found in the construction industry: as a reaction to the EU posted workers Directive (96/71/EC) [2], the collective bargaining parties in this sector explicitly agreed on a minimum wage which was subsequently extended by the Ministry of Labour (DE9909117F [3]). [1] www.eurofound.europa.eu/ef/efemiredictionary/extension-of-collective-agreements-1 [2] http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=31996L0071&model=guichett [3] www.eurofound.europa.eu/ef/observatories/eurwork/articles/undefined-working-conditions/dispute-over-extension-of-collective-agreements-in-the-building-industry
Article

In October 1999, the German Food and Restaurant Workers' Union (NGG) renewed its demand for the introduction of a statutory minimum wage in order to prevent an increase in the numbers of "working poor" in Germany.

In contrast to many other European countries, there is no statutory minimum wage in Germany. Companies which are covered by a collective agreement have de facto a collectively agreed minimum wage, while in other companies there is no regulation of minimum wages. In only a very few sectors has the Ministry of Labour extended collective agreements to make them generally binding on the whole sector. A recent example of the latter can be found in the construction industry: as a reaction to the EU posted workers Directive (96/71/EC), the collective bargaining parties in this sector explicitly agreed on a minimum wage which was subsequently extended by the Ministry of Labour (DE9909117F).

According to the Food and Restaurant Workers' Union (Gewerkschaft Nahrung Genuss Gaststätten, NGG), the existing system of pay determination is no longer sufficient to prevent the emergence of an increasing low-wage sector in Germany. Using the definition of a minimum equitable wage as 68% of the average national wage - as proposed by the Council of Europe's committee of independent experts on the implementation of the 1960 European Social Charter- there are estimates that more than 7 million full-time employees in Germany can be considered as members of the "working poor" (DE9702201F).

The growing size of the low-wage sector is not only the result of declining collective bargaining coverage (DE9905111N) but also relates to the fact that even collectively agreed minimum wages sometimes fall below the "poverty line", in particular in sectors with a relatively low rate of trade union membership. This is true, for example, for some sectors covered by NGG, such as hotels, restaurants and bakeries.

In contrast to other unions which take a more sceptical view on the introduction of a statutory minimum wage, NGG is one of its major advocates, and in October 1999 renewed its demand to the federal government. According to a member of the NGG executive board,Werner Weck, an equitable minimum wage for a full-time employee working a 35-hour week should be at least DEM 2,500 per month.

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