Union researchers question German plans for sectoral pay minimums

The WSI, the research arm of German union confederation the DGB, has warned that government plans to set legal minimum pay rates by sector may be unworkable.

The German government announced its intention to set new minimum rates across a number of industrial sectors at the end of April. It was responding to growing concerns that workers from Central and Eastern Europe were being employed below collectively agreed rates (see Labour Research, May 2005).

The government wants to extend to other sectors the arrangements which already apply in the building industry. There the lowest collectively agreed rate is also the legal minimum rate in the industry.

However, the plan depends on there being a single national agreement for each industrial sector.

As Reinhard Bispinck of the WSI pointed out, there are national agreements in only six out of 40 major industrial sectors. In most of the rest, agreements are formally signed at regional level. In some of the lowest paying industries, such as textiles and clothing, parts of Germany are not covered by agreements at all.

"It must really be doubted", said Bispinck, "whether employers' associations will simply be willing to sign additional agreements to allow sectoral minimum rates". He also said that many of the existing rates need to be increased if workers are to be lifted out of poverty.