The end of social partnership
International Viewpoint # 226 • April 13, 1992
GERMANY members who organize and represent the union in the enterprise. The representatives (some 300,000 of them) are supposed to be elected by the membership but are often appointed. The are meant to work for the union and activate the membership when required. Some activity is thus possible, but it is hardly encouraged.
WHEN West Germany's "social-liberal" coalition government fell more than ten years ago, it seemed that a turn in policy similar to that seen under Reagan in the US and Thatcher in Britain was on the cards. The unions were in fact driven onto the defensive, and anti-union laws introduced. But these have not been used and the workers have not suffered a frontal attack. Now however a change of tack is becoming apparent; over the past year the real average income fell by at least one and a half percent.
HANS-JÜRGEN SCHULTZ
T
HE restraint of the conservative government headed by Chancellor
Helmut Kohl was not the result of some sudden change of heart, but of favourable conditions, including a continuous boom, in which the real national income rose by more than a third (nominally between 1982 and 1990 from 1,224bn to
1,896bn DM). This was a golden decade for capital. Tax and interest rate policies led to an explosion of profits, which more than doubled (from 232 to 514bn DM). At the same time the share of wages fell to its level of the 1950s (from 69.6% to 62.1%).
Massive rise in investment abroad
These profits were not put to socially beneficial use, for example to tackle unemployment. Capital was placed in securities
(670bn DM — all figures henceforth for
1990) or exported (910bn DM). Investments abroad rose threefold in this brief timespan.
In these conditions, capital could pacify its social backyard. Real wages grew by about a tenth and the number of those in work increased. While unemployment hardly declined in absolute terms, the rate did drop somewhat (from 9.7 to 7.6%). The unemployed are more than ever concentrated in certain groups: the elderly, women
(8.2%) and immigrants (10.9%).
The number of union members remained more or less unchanged in this period at 7.9 million, although the rate of membership compared to the increased number of workers fell from 33.2 to 31.8%.
This latter figure is mainly due to the decline in the well-organized traditional industries, while white-collar workers are insufficiently unionized (some 2 million).
Two thirds of the membership increase over
14 the past twenty years is due to women, whose participation has risen from one to
1.9 million (in percentage terms from 15 to 24% of the total). While women have made considerable gains in terms of membership of union leaderships their participation at that level remains insufficient. There are, for example, only 17 women among the 118 members of the DGB (German trade union confederation) council and its 17 individual unions.!
Even where women make up a majority of members, such as in teaching, the textile industry and the commerce, banking and insurance sector, there are only six women among the 25 executive members. At the middle level their participation is even lower (eight out of 215 district executive members). Even more seriously under-represented are immigrant workers. There are none at the highest levels, almost none at the middle levels and even at the lower levels they remain very poorly represented.
The strength of the German unions lies in their apparatus rather than in rank-and-file activism. They ask from their members some one and a half percent of their wages. This means they have a yearly income of over two billion marks, to which should be added income from property.
Army of full-time officials
This pays for an apparatus of more than 12,000 officials, who in fact control everything. In the enterprises the apparatus is based on the enterprise councils ("personnel councils" in the public sector) and on representatives. The enterprise councils are elected by the employees to represent their interests and the costs are borne by the employers. They are legally irremovable. Some three quarters of council members are union members and - remarkably - over 30,000 have been released from their jobs for council duties.
These are almost exclusively union
Nonetheless, the unions are a strong, almost institutionalized power in the enterprises. Furthermore, in the big enterprises they are also represented on the board of directors (Mitbestimmung — "co-decision making"). In the steel industry and the mines they effectively occupy the post of labour director; that is, the person on the board responsible for personnel matters is a
These enterprise officials work to strengthen the basic orientation of the unions towards social partnership. As far as possible they avoid strikes which would require them to pay out strike money. The annual average of days lost through strikes between 1985 and 1990 was under 100,000. When serious defensive action is required, demonstrations are the preferred option with perhaps warning strikes of a few hours duration. In this way the unions seek to dispel doubts in the minds of the capitalists as to whether they are capable of mounting strikes.
The obstacle course to strike action
Before a strike can take place, it is first necessary to declare the "failure of negotiations", engage in a week of arbitration under a neutral arbiter agreed by both parties and hold a ballot in which three quarters of the membership must vote for strike action. An official strike can even then only be called with the agreement of the national union leadership.
Since in good times social peace is in the interests of capital, such rituals and long negotiations have usually resulted in a compromise.
The situation, however, has been complicated by the unification of Germany. The union confederation in what was once the German Democratic Republic (East Germany), the Free Association of German Unions (FDGB), had 8.6 million members when the end came. However, it had no real authority in the enterprises and within a month its apparatus disintegrated. The PDS, the new incarnation of the former ruling Communist party, turned out to be wholly 1. These figures are for the DGB to which 17 unions are affiliated. There are also the DAG (German Employees Union) which has some 500,000 members, the CGB (the Christian Association of Unions) with around 300,000 and the Deutschen Beamtenband with 800,000. This last is a caste organization which can hardly be called a trade union, while the CGB is completely uninfluential.
April 13, 1992 • powerless. The workforce awaited the West German unions.
Between October and December 1990 the FDGB's constituent unions formally dissolved. Their members entered individually into the DGB unions, with some exceptions where a collective transfer took place (rail, the food industry and the media). Overall a level of organization of about 50% has been achieved, involving between three and four million members — precise figures are not available.
The East German apparatus is overwhelmingly staffed by West German officials. Since they are the only ones who can advise and train still inexperienced enterprise councils, they have gained influence in the enterprises. Gradually, representatives are being elected. There is thus just as little rank-and-file union activity in East as in West Germany, leading to widespread disappointment that everything is to be controlled from above, as before. On the other hand there is no doubt that the unions have won respect through their negotiating successes.
Mass unemployment and lower wages in East Germany obviously represent a threat to wage levels in West Germany. The unions have therefore attempted to sharply increase wages there and limit unemployment.
Average wages in the East are only half those in the West (1,104 DM month compared to 2,277 DM), and the working week is six hours longer (43.5 hours compared to 37.7). These differences are an index of the catastrophic results of the Stalinist policies and have their effect on workers' thinking. Wages and working time are meant to reach Western levels by 1995, but will in fact take longer if special payments (holiday pay and so on) are taken into account.
There was only weak resistance from the capitalist side to this policy and this was easily swept aside by strikes and demonstrations in some important sectors, such as banking, rail, and some public sector workers. Wages were raised disproportionately and the working week shortened from 42 to 40 hours.
The union leaderships assumed that the enterprises would soon be taken over by West German capital and that the need was for temporary measures. They struck agreements that layoffs should be postponed in many enterprises until the middle or end of 1991 and afterwards employees' Emil societies set up for those ErKwho were professionally qualified. In some cases enterprises were occupied to oppose threatened closures. In others big demonstrations were organized, which in some cases took on a radical edge - perhaps 500,000 people took part in such demonstrations in 1991.
### Avoiding uncontrolled radicalization
In order to avoid uncontrolled radicalization, the government compromised. The unemployed were to be paid "short-time money" out of public funds - 90% of wages even when in fact there was often no real job at all.
Thanks to this policy real incomes in East Germany have risen by between 20 and 45% depending on the type of household since the fall of the neo-Stalinist regime. The only losers have been the privileged layers of that regime and more recently the unemployed. This explains why until now East Germany has remained calm and the expected radicalization has not emerged.
The "transition crisis" towards capitalism has meanwhile got worse. The number of those employed has fallen by some three million, from 9.7 to 6.7 million, a million being unemployed and migrants to the West and the rest having taken early retirement. It is to be feared that this figure will soon rise to five million since 700,000 retrainees and many on short time working will soon become fully unemployed.
The number of full time industrial workers has collapsed from 3.2 to 0.8 million. The victims suffer a decline in living standards — around 15% for the unemployed in the past year. The forthcoming rent rises will strengthen this trend.
Industrial production has fallen to a third
GERMANY of its 1989 level. Even repairs are no longer being paid for in most enterprises. The gross national product is only 193bn DM, of which 130bn are subsidies from West Germany. This is a burden almost twice as high as arms spending (70.6bn DM).
Even so, there is no sign of an economic recovery. The East Germans have simply been turned into inhabitants of a huge hostel for down and outs. A comprehensive process of de-industrialization has taken place in the two and a half years since the fall of the Berlin Wall. The destruction is more extensive and will be less easy to repair than during the great economic crisis of the 1930s or the Second World War.
This is the result of the policies of the "Treuhand" agency, responsible for restructuring the East German economy, which has pushed for mass layoffs and even closures where enterprises cannot be privatized. This latter process was usually accompanied by the sacking of the majority of the workforce. On the whole West German capital has hardly invested in the East. In 1991 such investments were less than 15bn DM, mostly going into trade and the infrastructure, rather than industry, since there was already sufficient productive capacity in the West.
Alternative scheme for privatization
The unions' alternative is to demand reform of the enterprises rather than their privatization. The existing enterprises, they say, should be made competitive using public money. This should be organized by private firms sharing costs with the "Treuhand" and the state. In steel and the shipyards pressure was applied through occupations and demonstrations and in such cases limited assurances were won. However, it should be recognized that unions and workforce have been fighting for a specific form of privatization rather than to defend public ownership of the enterprises. But this is already a rearguard action. The East German working class has surrendered first its "own" (at least in a formal sense) property and now its jobs almost without a fight, with the apparently unaffected West German workers looking on indifferently. Bitterness and directionless expressions of radicalism are to be found, but demoralization much more so. The consequences of this defeat 15 will return to haunt the # 226 International Viewpoint
International Viewpoint # 226• April 13, 1992
GERMANY whole German working class in the coming
The balance of forces has thus already changed and the spokespersons of capital are openly pushing ahead with their plans. So far, German unity has been wholly to their advantage. They have a new market of 16 million people and have been able to take over the lucrative parts of the East German economy, putting out of action possible competition in the process. The costs have been transferred to the state and the
Pensions and unemployment in the East are being mainly covered by West German contributions (in 1992 some 50bn DM, that is 2,000 DM for each wage earner or nearly a month's income, taxes borne exclusively by the wage-earners (with the share of taxes and social insurance payments rising from • 41.4 to almost 45% of wages) and public borrowing. This explains the fall in real incomes in the past year.
At the same time a debt crisis is ripening for the first time. Tax relief for capital in past years has been paid for by borrowing. This tendency has been strengthened by unification. The state debt has been snowballing, doubling in a decade — between 1985 and 1991 from 675 to 1,458bn DM with a projected 2,225bn DM in 1995. Meanwhile interest rates have remained high. Public payment of interest has gone out of control, from 67.6bn DM in 1986 to 101.5bn in 1991 with a projection of 172.5bn DM for 1995.
Capital's spokespersons have thus been calling for the state budget to be "tackled", by which they mean less welfare and more taxes (except for themselves). In this res-
### TUED pect, the Reagan/Thatcher programme has finally arrived in Germany with its "international competition in tax reductions". In Britain profits are taxed at 22%, in Germa-
This difference is in fact exaggerated since there are a multitude of exceptions and abundant opportunities for tax avoidance which are pursued as feebly as are tax arrears. This is estimated to acount for some 50bn DM of lost income for the state.
Worries about international competitiveness
German capital is also worried about its international competitiveness. This has depended on a high technical level, good organization of sales, and reliable delivery and servicing. But elsewhere working conditions have deteriorated and real wages fallen. Thus working time in Germany is the lowest (1,1506 hours, compared to 1,625 in Britain, 1,847 in the USA and 2,165 in Japan) and wage costs the highest (14% higher than in the USA and 23% higher than in Japan).
Such figures are certainly one sided but they reflect a real trend and reveal the real goal of West German capital: to push down wages and social benefits while increasing
Capital's change of policy has been activated by the international recession. barometer points to stormy" says the German daily Die Zeit. Since the middle of last year productive capacity has grown while production has stagnated and orders fallen.
The employers' associations have been putting pressure on the government for a long time and have even been giving it public warnings. "The economy is in a lasting depression and the political feeling about the bourgeois government is worse", declared Murmann, the president of the BDA (Federal Union of German Employers). Real wages must fall.
And truly it is the case as Matthias Kleinert, previously government spokesperson in Baden-Württemberg now doing the same job for carmakers Daimler-Benz, has put it, that "politics is about rhetoric, the economy is the reality". The federal chancellor is calling for the lengthening of the working day and later retirement (70 instead of 65 years) and the opposition social democrats of the SPD have been signalling their willingness to enter a coalition
The offensive has opened first on the wages front. The benchmark was set by the banks who offered their employees practically nothing. The employers broke off negotiations and unilaterally raised wages by 5% — a loss in real terms.
The unions are weak in this sector and could not reply with an all-out strike. They had to be content with occasional short strikes of from a few hours to three days duration. Even so these actions were more successful than the unions were expecting. Towards the end of March over 70,000 bank employees, about a fifth of the workforce, the majority unorganized and with little experience of struggle, took part in such actions, mostly accompanied by
This shows a readiness to fight that could be increased if the East German bank workers, who have a higher level of organization (50%) decide to join in.
The next round will take place in the public services. With the support of the SPD, who are in control of most of the Länder and many communes, a wage offer of a
The negotiations were broken off and the arbitration procedure opened. This will postpone further developments until the end of April. Similar events are taking place in the engineering industry, the stronghold of the union movement.
Four decisive months
The next few months will show if the German capitalist class is already in a position to introduce fundamental changes. The unions' negotiating position is still strong. In the public sector and in engineering the rank-and-file are preparing for a strike.
It remains, however, to be seen whether the unions are really determined to fight. And there is room for doubt. The slogan for the First of May is "bind the parts together" ["Teilen verbindet"]. In this way "sacrifices" for East Germany are being popularized. *
Seeking a niche in the New World Order