Andrea Nahles, Germany’s labor minister, fought hard for the country’s new general minimum wage of €8.50, or $10.90, that comes into force in 2015. Exceptions, for example for long-term unemployed, had to be painstakingly wrenched from her. What impression is made then, if a state-owned company outsources work abroad, thereby circumventing the state’s own existing minimum wage rules?
This is a question that has arisen following a verdict handed down by the European Court of Justice last Thursday. According to the ruling, the Bundesdruckerei, or Federal Printing Office, is entitled to commission a Polish subcontractor, even if it does not pay the wages that would be paid for the same work in Germany.
There are no legal loopholes in the state’s case, but it is nevertheless questionable. It shows once again, that the government is not fulfilling its role as a model employer often enough.
“The public sector especially should set a good example and prevent everything that promotes wage dumping processes,” said Stefan Körzell, a board member of the Federation of German Trade Unions, known as the DGB.
The federal government as owner of the Bundesdruckerei should not allow anything that would circumvent the minimum wage, such as buying cheaper services via subsidiary companies in neighboring countries, Mr. Körzell argued.
Achim Meerkamp, director of the Verdi trade union, says that the state has increasingly stepped back from its duties in recent years. That is evident from the staff reductions, the growing number of temporary work contracts in the public sector and the outsourcing of services formerly provided by the state.
“Fleeing collective bargaining agreements and wage dumping were in many cases a motive for outsourcing,” criticized Mr. Meerkamp. Along these lines, the state forestry operators in the state of Brandenburg did not shy away from awarding contracts to third parties, something that was recently criticized by IG BAU, the labor union for construction, agriculture and environment. These contractors only paid their employees €4.10 per hour.