Thursday 29 July 2021
For the first time in ten years
Collective wages cannot compensate for inflation
Inflation is so strong that, according to a study, even collectively agreed wage earners will have to reckon with a real decline in their income in 2021. One expert hopes that upcoming negotiations can cushion the gap a little.
For the first time in a decade, the rise in collectively agreed wages in 2021 is unlikely to be enough to offset the general rise in prices. The main reason for this is the effects of the corona crisis, as the economic and social science institute of the union-related Hans Böckler Foundation reported in an interim review of the collective bargaining round.
According to the collective wage agreements concluded in the first half of the year and in previous years for 2021, wages will rise by 1.6 percent this year, according to the WSI. In view of the recently significantly increased inflation rate, the real collective wage development will be slightly negative with a minus of 0.2 percent. This has only happened three times in the last 20 years: 2006, 2007 and 2011.
In 2018 and 2019, collectively agreed wages rose relatively sharply with increases of 3.0 and 2.9 percent. But since the spring of 2020, the wage disputes have been “entirely dominated by the corona crisis,” said the head of the WSI tariff archive, Thorsten Schulten. In 2020, collectively agreed wages only rose by 2.0 percent and the downward trend continued in 2021, so that this year only an increase of 1.6 percent is in sight.
The downward trend was tempered by the collective bargaining agreements concluded for 2021 in recent years. In the case of the new collective agreements concluded in the first half of 2021, the wage increases averaged only 1.1 percent.
However, collective bargaining expert Schulten hopes that there is still room for improvement in terms of the deals in the ongoing or imminent collective bargaining negotiations, for example in the retail sector or in the public services of the federal states. After all, these are industries in which the corona pandemic demanded very special performance from employees. “It is therefore quite possible that at the end of the year the interim results presented today for 2021 can be revised upwards somewhat,” he said.
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