German Unions: Good Guys or Reform Blockers?

Thirteen years after reunification, employees at eastern German car, steel and machine tools factories in the former communist states work 38 hours a week -- three more than their western counterparts do for the same wage. For the past week they have been on strike, trying to close that gap.

But business leaders say eastern productivity still lags behind and some fear the strike could irreparably damage the fragile economy in the former communist part of Germany. Whereas in the western states unemployment is around 8 percent, in the depressed east the jobless make up nearly 18 percent of the total workforce.

Instigated by the mighty IG Metall trade union when many easterns are looking for work, the strike has caused some to question whether organized labor wields too much power. Recent opinion polls show that increasing numbers of Germans agree that their government must scale back its generous social welfare system in order to awake from its economic slumber.

But the unions have remained staunchly opposed, determined to defend the welfare state they spent decades helping to erect. Instead, the unions advocate a plan calling for increased public spending in order to stimulate the economy.

New attitudes toward unions

Their resistance to reform has led many Germans to turn their back on organized labor. Union membership has dropped to 7.7 million last year, from 11.8 million in 1991. And a recent Infratest poll showed that 50 percent of Germans now say union power should be curbed, versus only 26 percent who think their influence should rise -- the exact reverse of four years ago.

With the Germany economy currently in such a precarious state, the latest strike runs the risk of even further isolating the unions from the public at large.

"What IG Metall is doing in the (eastern) states is destroying jobs," opposition Christian Democrat party leader Angela Merkel recently told ARD television last month.

Unions in Germany not only exercise their power through demonstrations and work stoppages. They also can count 80 percent of the Social Democratic party’s (SPD) federal parliamentarians as members.

"In order to placate the unions, the Social Democratic party sought union-backed candidates during the last elections, to ensure that union people were actively involved in the party," said political scientist Hans-Peter Müller.

The strong union presence in government means it is sometimes hard for German Chancellor Gerhard Schröder to push through his economic reform agenda, and an ever-widening rift has formed between the SPD and its once die-hard constituency.

As German growth has stalled, Schröder’s government has begun attempting to push through desperately needed reforms to the country’s overburdened welfare system and its inflexible labor market. While the government is now opposing organized labor, only a few years ago it was toeing the union line.

A good example is the issue of job security. During the last parliament, Schröder's government amended a law making it harder to fire workers in response to union pressure. Because of the dire economic situation, however, the law is once again on the table.

Worker participation

In the early days of the West Germany, the unions' goal was to achieve worker participation in industry. They quickly became a force to be reckoned with, and step by step they achieved cuts in working hours and broke the employers' right to dictate wage levels.

Since the 1950s, unions have grown to hold at least a third of the seats on German companies' supervisory boards. In the coal and steel industry, they hold a good half of the seats on every such board.

In the current labor dispute rocking eastern Germany, one steel company, Eko Stahl in Eisenhütten near the Polish border, has already acquiesced to workers' demands. It granted the 35 hour week in order to get production up and running as quickly as possible.

Ralf Koehler, the representative of IG Metall at Eko Stahl, says the 35 hour week is fair. "Economically, we've been making a profit for years. The company is earning millions of euros and we want our just share," he said.

Other workers are more in line with the government than their own union, however. Jörg Heymann, a maschinist at Eko Stahl, opposed the strike.

"(Keeping) my job is more important, regardless of the hours," he said.