28-Hour Week

A Looming Working Time Battle

  • Why it matters

    Why it matters

    A major German union is pushing to reduce the working week and offer workers more flexibility. Employers say the proposals could derail the German economic boom.

  • Facts

    Facts

    • One of Germany’s most powerful unions, the engineering workers’ union IG Metall, is to push for a reduction in statutory working hours to 28 per week.
    • A recent survey suggests 46 percent of all Germans would rather have more holidays than a pay increase.
    • Employers organizations remain deeply opposed to across-the-board cuts to working time, saying they would drive up labor costs and threaten the survival of many businesses.
  • Audio

    Audio

  • Pdf
IG Metall – Warnstreiks in der Metall- und Elektroindustrie
Is it really that simple? Source: Timm Schamberger/DPA.

The right to work less, often for the same pay, looks set to be the main demand by labor unions in upcoming pay talks involving nearly 4 million engineering and metalworkers in Germany. Two decades after it achieved a 35-hour working week, one of the country’s most powerful trade unions, IG Metall, is set to push for a possible reduction to just 28.

Employers’ organizations have reacted vehemently to the suggestion. Rainer Dulger, the chairman of Gesamtmetall, a prominent metal and engineering employer group, told Handelsblatt that a 28-hour workweek would entail the collapse of collective labor agreements and production being outsourced abroad. “This could permanently wreck our economic success,” he said rather darkly.

With federal elections just over two months away, the question of working hours is moving up the political agenda. “I am very happy that the unions are starting this debate, and I am hoping for wise decisions by the social partners,” Carsten Schneider, vice parliamentary chair of the center-left Social Democratic Party, or SPD, told Handelsblatt. Boosts to productivity from digitalization could be reflected in shorter working hours, he said.

“This could permanently wreck our economic success.”

Rainer Dulger, president, Gesamtmetall employers’ association

Mr. Dulger said unions should not underestimate management’s determination to resist the move. He said employers clearly remembered the bitter strikes led by unionists demanding a 35-hour week, which in 1984 paralyzed the engineering sector for seven weeks: “For companies, this is absolutely an emotional issue.”

Nonetheless, it seems engineering unions are determined to make the 28-hour demand a central plank of upcoming industry-wide collective bargaining. At the end of last month, Jörg Hofmann, the head of IG Metall, called for a “breakthrough in working time.” He said employees wanted “work time that fitted their lives. Available to everyone.”

The union’s proposals do not amount to a blanket cut in working time, but ultimately greater choice for individuals. “This is about the right to a temporary cut in working hours, for example to 28 hours a week,” he said. The union will present its opening negotiating position on October 24.

There is still a difference between the official working week in former West Germany and former communist East Germany: By law, the standard West German working week is 35 hours. This was introduced in 1995, after years of compromises following the 1984 strike. In former East Germany, however, 38 hours remains the official norm. All over the country, there are some exceptions to allow employers to get around this maximum.

17 p5 Salaries and Working Hours-01

In the last two decades, the actual average time worked by employees in the country as a whole, has remained steady at around 38 hours per week, across all economic sectors. However, there is considerable variation according to industry, and also by gender and age. Many more women work part time to care for children, while some middle-aged workers cut working time to care for elderly relatives.

Germany’s sustained economic boom has led to a steady increase in salaries, which seems to have made some employees willing to contemplate lower pay in return for more time off. But vacation days are more popular than cuts in daily obligations. As part of its last pay deal, the publicly-owned railway company, Deutsche Bahn, offered 130,000 employees a choice between a 2.6 percent pay rise, an hour off their working week, or six extra days holiday. 56 percent voted for more vacation and 41 percent for more money, with just 3 percent opting for shorter weeks.

A recent survey for Handelsblatt’s sister magazine Wirtschaftswoche suggested that around 46 percent of all working Germans would prefer to be given more holidays than more money. But in IG Metall’s own industry, the picture is more mixed. A large-scale survey carried out for the union showed 45 percent of the engineering industry workforce working more than 35 hours a week. Only 20 percent of those asked wanted to work less than 35 hours per week, with almost a third saying they would prefer to work longer hours.

A recent pay agreement in the eastern German chemical industry has been hailed by some as a way forward. Based on the so-called “Potsdam Model,” the agreement initially allows for flexible solutions, ranging from 32 to 40 hours per week, to be worked out on a firm-by-firm or department-by-department basis. From 2019, this choice over working time will be extended to individual workers. Employers praised the deal as offering the flexibility that the sector needs to attract workers in a time of full employment.

“Cutting working hours would catapult unit labor costs to unpayable levels.”

Reinhold von Eben-Worlée, president, Association of Family-Owned Companies

Labor Minister Andrea Nahles has long called for these kinds of flexible arrangements, seeing them as a way of accommodating workers’ needs while also allowing employers to get around rigid restrictions on working time. Ms. Nahles, a Social Democrat, had hoped to push through new measures on this before the election, but was opposed by her coalition partners, Chancellor Angela Merkel’s center-right Christian Democrats.

Ulrich Walwei, the vice-chairman of the IAB labor market research institute, considers this to be regrettable. “More flexibility is possible nowadays, in part thanks to home office,” he said, citing the American “results-only culture, whereby” only the result counts, and not when, or where the employee actually works. Such models could have been experimented with, said Mr. Walwei, adding that there are still obstacles to individual adjustment of working hours in Germany — from insufficient daycare to tax provisions.

The proposal features in the SPD’s election program, along with ideas of subsidized family working time – where the government helps pay for workers’ time off to care for families – and a “workforce account,” allocating €20,000 per person, around $23,000, to pay for further training or for reduced working time. The Christian Democrats likewise have included proposals for family-friendly working time in its election manifesto, including a statutory right to go from part-time to full-time work.

Menschen und Ereignisse 1972-84
Employers don’t have fond memories of the bitter 1984 strikes. Source: Klaus Rose/DPA.

IG Metall is not waiting for lawmakers to pass reforms: it is determined to achieve new rights through its own struggle. Mr. Hofmann, the union’s leader, has said he is in favor of reduced working time on full pay, if the time is used to care for children or the old. “We want to include this modern benefit in our negotiations: time for children and for caring is socially necessary.”

Mr. Dulger, from the engineering employers’ organization, pointed out that the public might not look kindly on well-paid engineering workers forcing through more benefits for themselves. The average annual salary in the industry is €55,000, which goes along with some of the lowest average working hours in any sector.

Alongside Mr. Dulger, other industry figures criticized any move to further reduce working time. Reinhold von Eben-Worlée, the head of the association of family-owned companies, said the move would only exacerbate the country’s serious skill shortages. “Unit labor costs will be catapulted to unpayable levels,” he said. Steffen Kampeter, the managing director of the BDA employers’ association, warned: “Rigid demands from unions and politicians completely lose sight of practical questions: The amount of available work is decided by customers and orders, not laws or personal wishes.”

 

Frank Specht is based at Handelsblatt’s Berlin bureau, where he focuses on the German labor market and trade unions. Klaus Stratmann covers energy policy and politics for Handelsblatt in Berlin. Jan Hildebrand leads Handelsblatt’s financial policy coverage from Berlin and is deputy managing editor of Handelsblatt’s Berlin office. To contact the author: stratmann@handelsblatt.com, specht@handelsblatt.com, hildebrand@handelsblatt.com

Want to keep reading?

Download our today, and get free trial access to distinguished coverage of Europe’s leading economy, from its No. 1 name in financial news: Handelsblatt.