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rea Berlin Charité is one of many places where Ver.di is causing a stir this week. On Monday, employees began warning strikes on the early shift, and these will end on Tuesday with the late shift. There are similar campaigns throughout the country in clinics, municipal public services, day care centers and other facilities.
The objective: The union wants to persuade employers to make concessions in the collective bargaining of the public service of the federal and local governments. But with that it moves on thin ice. This is not just due to the fact that citizens, already affected by a pandemic, have to accept more restrictions. But also in the demands and arguments behind the strikes.
Because the negotiations for the 2.4 million employees are about pay increases that other employees today can only dream of. Ver.di and Beamtenbund DBB are demanding 4.8 per cent more wages and salaries for a period of one year, but at least 150 euros more per month. Ver.di immediately rejected the employers’ first offer last Friday, which includes a 3.5 percent raise in three annual stages, as “disrespectful.”
Unions are using a generalization strategy: They declare that employees are heroes of the crown who have achieved extraordinary things in the crisis and thus have made more money. But the argument lags behind, and shortly before the third round of negotiations on October 22 and 23, it fuels demands for a moderate deal and more targeted pay.
“There are more compelling arguments for a moderate pay round than for a substantial increase,” said Clemens Fuest, president of the Ifo Institute in Munich. “Adaptation must be differentiated.” That is entirely possible, at least in part.
Central criteria: macroeconomic development and budgetary situation
To argue for exceptional performance in the Crown crisis runs into a contradiction. “The hero argument does not apply to all public service, because many professional groups are not affected by the pandemic,” said Torsten Schmidt, economic director of the RWI Leibniz Institute for Economic Research. As an example, he cites research institutes, which also belong to the public service.
Basically, there is less data available than in the free economy, where indicators such as turnover, profits and productivity play a role. In the past, unions used mainly the evolution of wages in the economy as a whole or in other sectors as guidance. The president of Ifo Fuest does not see any major backlog that needs to be caught up. From 2009 to 2018, collective wages in the public sector increased nominally by around 24 percent. The general economic average was 25 percent.
Source: WORLD infographic
Another criterion is the budget situation. “We expect a historically high deficit in the federal government and in many municipalities,” said Schmidt. “You should not ask for a salary increase that goes far beyond inflation.” For next year, RWI expects an inflation rate of 1.5 percent.
In addition, the crisis shows the value of another advantage: job security. From Fuest’s point of view, this is also an argument for the reluctance to increase wages, which must also be co-financed by taxpayers who fear for their jobs.
What differentiation is there so far?
Professions are divided into different pay groups. Right at the top, in group 15, belong, for example, specialists from the health authorities and managers of a municipal company with “considerable responsibility”. In group 1, on the other hand, there are cloakroom staff and staff at the food counter. For this alone there are distinctions.
Special negotiations are also possible. For example, as part of the current round of collective bargaining, there are additional tables for savings banks and the health professions. The offer of the coordinating organization VKA (Association of Municipal Employers’ Associations) includes, for example, an attendance allowance, which is intended to bring employees in hospitals and healthcare centers an additional 50 euros per month.
Subsidies are also provided for intensive care and alternate shift staff. For health authority employees who were particularly stressed by the pandemic, employers propose separate lump-sum payments. In particular, Ver.di described the proposals for the healthcare sector as “really blatant.”
“In areas where the public service struggles to hire qualified personnel, it makes sense to have more scope for better pay,” said Ifo president Fuest. One way to upgrade certain groups is to upgrade them to higher-paid groups. “If there is a consensus to improve certain professions, these tariff classifications should be fundamentally changed,” explains Kai-Uwe Müller of the German Institute for Economic Research (DIW).
What further differentiation is possible and which is not?
There are separate tables for educators and caregivers, for example. However, the DIW researcher does not find it sensible to differentiate between occupations in negotiations. Because it would lead to complicated deals where many individual points would have to be negotiated, says Müller.
RWI’s chief economic officer, Schmidt, sees another problem: “If negotiations were to be conducted separately for different professions, small groups could create massive pressure to enforce their demands.” Other groups would walk away empty-handed.
For him, the solution lies in unique recognition. “With bonus payments, you can reward people who are particularly stressed and overwhelmed,” says Schmidt. “But it doesn’t make sense for Corona’s heroes to win more in the long run because they were so stressed during the crisis.” The extra work must then be separated from the general change in wages.
An additional means of differentiation is a so-called performance-oriented pay, or LOB for short. The clear majority of municipal employers have agreed to this system, according to the main association VKA. Performance is systematically evaluated or goal agreements are used.
Ver.di thinks little of the instrument. LOB is used very differently: “It ranges from sophisticated systems to the principle of the shower. No one really caught fire from this instrument, ”the union said.
In his opinion, what speaks against LOB is that it is difficult to measure performance. As an example, he cites a legal department. Here several performance evaluation criteria can be conceived: the number of processes processed, the procedures won or avoided. Perhaps, however, conflicts should have been defused in advance or “citizen friendliness” should be taken into account.
“This is to make clear that incentive systems in the administration can have very contradictory effects,” says Ver.di. Therefore, the union wants to abolish the LOB. Employers see it differently. In the current round of collective bargaining, they propose to be able to use the money available to the LOB for other purposes, for example, for grants for fitness studies or job tickets.
The collective bargaining partners should continue to discuss this on Thursday and Friday. The only thing that seems certain is that pay will probably not increase based on performance.
