German workers opt for jobs over real pay hike
Several million West German workers have just accepted a real pay cut for the second successive year in an effort to save recession-threatened jobs.
Europe's biggest labor union, the Metal Workers' Union (IG Metall), accepted an annual 4.2 percent wage rise this month on behalf of 3.7 million workers in the engineering industry. This raise, however, does not keep up with the government forecast of a 5 percent average inflation rate for 1982.
For IG Metall's pay negotiators, the most important statistical guideline was not the current 5.8 percent inflation rate or the government's 5 percent forecast. It was the gloomy news from the Federal Labor Office that 2 million West Germans are now out of work -more than 8 percent of the work force - while job vacancies are at an all-time low.
Because of its size and the fact that it traditionally opens the annual wage round, IG Metall sets the trend for West German pay deals. Negotiations in the construction and chemicals industries, which are still continuing, seem likely to end with even lower settlements. And the government began this year's public service wage talks by offering only a 2 percent increase.
Bonn believes that in these times of austerity, civil servants should accept a drop in their standard of living in return for guaranteed job security.
Union officials at IG Metall say the pay deal was their contribution to the national fight against unemployment. The bosses' side of the bargain, they say, is to boost investment and create more jobs.
But some labor organizers admit even that hope may be exaggerated. ''If we succeed in maintaining present employment levels this year, we will have done well,'' says Heinz Schmitz, a union official at a Cologne auto works. ''These are tough times for unions, and we have to weigh our responsibility for the whole economy against the demands of our members.''
There has been virtually no protest in West Germany over the fall in real buying power. Economics Minister Otto Lambsdorff was quick to praise IG Metall's ''moderation and responsible conduct,'' while the employers' federation warned that the country still has the highest wage costs of any major industrialized country.
But the West German pay settlement aroused both fear and some envy across the Rhine in neighboring France and Belgium.
France's Communist Party leader Georges Marchais said there was no way French workers would accept similar wage cuts. Austerity, he said, was not the answer to the economic crisis.
''German workers took pay cuts last year, and the result was not less unemployment but 49 percent more unemployed,'' Mr. Marchais said.
France is not only Bonn's biggest trading partner but also a major competitor in the lucrative foreign markets of North America and the Middle East. The Paris daily Le Monde warned that the pay deal would give West German industry a competitive edge over French firms because German unions were prepared to put jobs before purchasing power.
In Belgium, another big trade partner, government attempts to lower wage and welfare costs have been met by a wave of strikes.
Foreign diplomats in Bonn say the West German unions are more prepared to practice wage restraint because workers enjoy a considerable say in the running of industry through boardroom co-determination. Thus the 500,000-strong chemical workers' union and the smaller food and drink industry union have introduced novel proposals for fighting unemployment in this year's wage round.
They have a plan for early retirement that need not cost the taxpayer an extra cent. Workers would be asked to contribute part of their annual pay rise to a pension fund for colleagues retiring voluntarily at 58. Employers would contribute half of the cost.
The workers would receive 68 percent of their final salary tax free until they reached the age of 60 and got a state pension. Employers would try to fill the vacant jobs with young school graduates.
Bonn politicians believe the early retirement plan could be a better answer to the unemployment problem than the 35-hour work week that France's Socialist government is seeking to achieve by 1985. But officials fear it may come too late to prevent high unemployment over the next few years as the children of the so-called ''baby-boom'' years flood the labor market.
''For the moment, we are talking less about improving the situation than about preventing it from getting dramatically worse,'' a Labor Ministry official said.