To Strike or Not to Strike

The parties seem miles apart. Germany’s second-biggest union, IG Metall, wants a wage rise of 6.5 percent. Employers say that number is much too high, especially in a year when the economy is struggling to get back on its feet. They are offering 2 percent.

Now the annual play has begun, set out in a script that unions and management follow faithfully and whose ending generally has the adversaries meeting somewhere in the middle.

“To Strike or Not to Strike”

Act 1 features the all-important wage negotiations, where pay scales are set for an entire industry. Their frequency depends on how various contracts are structured, however, they generally take place every 12 months. In IG Metall’s case, whose members work in the metals and electronics industries, labour and management sat down in February.

Act 2 follows depending on the outcome of act 1. This year, the parties could not come to an agreement, but instead of marching immediately out onto the streets, members are obliged by German law to sit out a four-week cooling down, or “peace” period.

Act 3 is where the play is now, the warning strike phase. These are short work stoppages of usually only one or two hours. These “mini-strikes” are more of an annoyance to employers than a serious threat to production schedules and budgets. They are intended to serve as a taste of possible things to come, that is, longer strikes, if management refuses to come closer to union demands. But usually after a series of stoppages and all-night talks, both sides agree to a deal that is about half way between what unions demand and employers offer.

And if act 3 does not bring about results unions can accept, they move onto the final act, full-scale strikes. If no settlement emerges this year, IG Metall has said it will launch a nationwide action on April 8.

Barking, Rarely Biting

While German unions still wield a great deal of influence in Germany, only 32% of Germany employees are actually members of one. And laws surrounding when and how workers can strike make large-scale disruptions of daily life, which are so common in France for example, a relative rarity in Germany.

Politically motivated strikes, which often shut down French roads when farmers strike against government policies, are illegal in Germany. The warning strikes like those called now by IG Metall may irritate management, but they rarely lead to larger actions. In fact, the last large-scale strikes in Germany took place in 1996, when 100,000 employees in the retail sector protested against longer shop hours.

And despite frequent flag waving and whistle blowing by German union members, during the 1990’s only 11 work days were lost on average due to strikes. Only Switzerland, Japan and Austria had fewer. US companies had to count on five times that number of days lost to labour actions. French employers lost an average of 77 days a year.

“Strikes in Germany have become less frequent over the decades,” said Dr. Hagen Lesch of the Cologne Institute of Business Research. “The decline started in the 1970’s and every decade since we’re seen fewer and fewer work stoppages.”

Unions Losing Members

The worldwide trend of declining union membership rolls is also reflected in Germany. As Germany shifts toward a service sector and high-tech economy, its manufacturing base—the traditional stronghold of trade unionism—continues to erode.

IG Metall lost 53,000 members in 2000 alone. Of eight large unions in Germany, only one, the new ver.di service sector union actually gained members. The others shrunk, usually by the ten of thousands.

Still Have Clout

Still, union culture is deeply ingrained in Germany. Although many business leaders and analysts say trade unions and their ambitious wage and labour demands hinder rather than help the German economy, unions still find wide support among the German populace.

A survey by the Emnid Institute published this week showed that 57 percent of Germans said they thought the current strike action was justified. Only 47 percent opposed it.

Chancellor Gerhard Schröder might find himself in the latter category as of late. The latest scuffle between labour and management has become a headache for him. He is facing a re-election battle this year and needs for the German economy to climb out of the doldrums. He has called on the unions to moderate their wage demands so as not to endanger the nation’s slowly improving economic situation.

At the same time, the Social-Democrat does not want to alienate his traditional union allies. So he is moderating his criticism of union demands and hoping analysts’ predictions that unions and employers will finally agree on a 3 percent pay hike come true.