Stronger Together

German trade unions unexpectedly carried out a series of robust warning strikes and actions in the first months of 2023. Last autumn, demands for double-digit wage increases at Deutsche Post AG (15 percent) for the nearly 2.5 million employees at the federal and municipal levels (10.5 percent or at least 500 euro) as well as at Deutsche Bahn AG and other rail transportation services (12 percent or at least 650 euro) garnered attention.

These attempts to secure real wages and stipulate minimum increases in face of inflation — which disproportionately affects people with low incomes by raising prices for basic necessities — seem to have met the workers’ expectations. At the same time, they are well aware that the shortage of skilled workers allows them to leverage more power in the marketplace — the unemployment rate was at a record low of 5 percent in 2019, according to the German Federal Labor Agency, and fell back to 5.3 percent after a slight increase during the 2022 pandemic.

The turnout for the Deutsche Post warning strike was very high and — as the strike vote made clear — so was the willingness to strike, and a deal was brokered in early March. However, it was initially unclear whether the public sector unions were in a position to transform workers’ concerns into an increased assertiveness or a willingness to take action, as they are among the unions most severely weakened in recent decades.

Attacks on the Public Sector

Since the 1990s, German federal governments have privatized and liberalized the public sector, using EU austerity regulations and debt limits to implement spending caps through cutting staff, increasing workloads, precarious employment, lowering incomes, and weakening unions. Although Deutsche Bahn remains state-owned, in 1994 it was transformed into a commercial enterprise under private law. Since the 1996 railway reform, a considerable share of all rail transportation services, whose workers are also represented by the Railway and Transport Union (EVG), has been taken over by private operators.

The situation is similar in those sectors organized by Verdi, Germany’s nationwide services sector union. When the privatization of local public transportation or waste disposal services got underway, groups of workers that traditionally stage powerful strikes were excluded from the public sector collective bargaining agreement. In the 2000s, the remaining sectors were also divided after the collective agreements for state employees were separated from those for federal and local government employees. Accordingly, unions’ prospects for assertiveness were weakened.

While even the EVG (or its predecessor, Transnet) has at times been known to advocate for the privatization of Deutsche Bahn, the ongoing deterioration of the situation has left much of the workforce that falls under the vast and diverse category of the public sector feeling demoralized. As a result, despite all the attacks launched by employers, the public sector has not seen a sector-wide strike since 1992.

Union Revitalization?

Given this situation, both EVG and Verdi have recently made marked efforts to increase their assertiveness. For example, a generational change took place within the EVG after the most recent round of collective bargaining during the COVID-19 pandemic. Aware that it would have to compensate for the losses suffered in 2021, this new leadership announced an offensive strategy for collective bargaining disputes and structural changes right from the outset. Having formulated the goal of establishing unified standards, it intends to negotiate not only for the approximately 180,000 employees of Deutsche Bahn AG, but also for tens of thousands of workers at 50 different private railways.

During the 2020 round of federal employee negotiations, Verdi was alarmed by the way employers were able to stonewall workers, many of whom were on the front line during the pandemic. Accordingly, in 2020, Verdi began implementing a plan to build up its power, using organizing strategies such as training workers in how to negotiate, appointing collective bargaining negotiators, work strikes, strength tests, and video conferences after the negotiating rounds.

How the wages and working conditions of those who provide important services in hospitals, municipal offices, and day-care centres are structured is ultimately an issue for society at large.

Even before the first round of negotiations, Verdi kicked off the 2023 collective bargaining rounds with an unusually large number of major warning strikes, in which 500,000 union members participated. As a test and demonstration of its own strength, the union collected more than 340,000 signatures in favour of enforcing the collective bargaining demands in companies and facilities. Work stoppages — that is to say, strikes undertaken by some active workers in order to make time to plan a strike — took place across the board. It was surely because of this approach that Verdi was able to announce that 70,000 new members had joined its ranks in the first three months of 2023 alone — the highest number since the union’s founding. By comparison, 110,411 new members joined Verdi in 2022.

At the same time, Verdi and EVG realized one of the old demands of left-wing trade unionists by agreeing to stage a joint warning strike which drummed up enormous amounts of public attention for the “megastrike” on 27 March. The warning strikes paralyzed public transportation nationwide, in addition to various airports, shipping ports, and domestic waterways, and in doing so were able to exert pressure on the private sector.

Verdi highlighted its significance for tackling climate change by staging a strike day for public transport workers on 3 March. On top of that, cooperation between trade unions and the climate movement, which began in 2020, was reinforced when bus drivers participating in the warning strikes joined the Fridays for Future climate strike. This marked a first step in the transition from a symbolic to an economic climate strike.

On 8 March, International Women’s Day, Verdi made an effort to collaborate with partners from various social coalitions, calling on educators in several regions to go on strike and, by holding joint demonstrations with local women’s strike alliances, made it clear that wage levels in the civil service sector are a social issue.

Outcomes of Arbitration

During the negotiations, public-sector employers made it abundantly clear that they had no intention of using the collective bargaining round to compensate for the loss of income suffered by large sections of the population or to make working in the public sector more attractive. Instead, they argued that the public purse was strapped and hence would not permit significant wage increases.

Consequently, Verdi declared that the negotiations had failed after the third round. The negotiating parties then settled on a settlement by way of an arbitration procedure. The settlement’s recommendations essentially consisted of a tax- and duty-free one-time payment of 3,000 euros in the first year, and a basic sum of 220 euro plus a salary increase of 5.5 percent in the second year.

In the subsequent negotiations on 22 April, the two sides reached an agreement on this basis. In the process, the unions were forced to make several concessions on their demands: the terms of the agreement lasting twice as long, the fact that across-the-board wage increases would not be effective until March 2024, a significant reduction in social benefits, and the fact that the total amount does not compensate for the losses in real wages that have taken place in recent years.

The agreement was eventually passed despite opposition from employers, some of whom voted against it in the arbitration committee, seeking to ultimately make it significantly worse throughout the course of the negotiation process. Verdi stayed on the offensive during the arbitration process, preparing for strikes and a strike ballot, which may have paid off in the end.

However, in the end, arbitration hampered Verdi’s ability to direct the process. A long pause in warning strike activities, the fact that the compromise was negotiated by arbitration rather than in negotiations, and the fact that the public considered the settlement obtained in the arbitration process to be the end of the dispute were all factors that led to demobilization and uncertainty about the unions’ abilities to assert their demands through a strike.

In light of the escalating wage dispute, it is time to begin forming a coalition dedicated to defending and expanding the public sector in Germany.

The membership survey, which took place from 4–14 May, provided a diverse picture of what the union rank-and-file think. However, a majority still came out in favour of accepting the agreement, partly because carrying out a strike — which even the union leadership feels weary of — is no longer a realistic option for most union members.

Regardless of one’s assessment of the current situation, the main takeaway is that the arbitration agreement must be called into question, since it thwarts the self-determination of the union rank-and-file in discussing new strategic prospects, creates disunity within the union as a result, and poses a clear obstacle to harnessing the strength that has been built up through an rolling strike.

The EVG is also being swept up in the arbitration process. Two weeks ago, Deutsche Bahn already offered rail workers the same volumes and structure as those in the arbitration agreement outside the regular negotiation framework. Even if the EVG promptly rejected it — compared to the public sector, the pressure to act is even greater due to wage levels, real wage losses, and staff shortages — the agreement in the public sector will still surely have an impact on their collective bargaining dispute.

Politicizing the Dispute

Given that inflation will bring billions in tax revenue into the government budget, it was surprising at first to see public employers take such a tough stance. But pointing to the costs of the wage increase is just a pretext, since it is not economic factors but political ones that determine how wages develop in the public sector.

How the wages and working conditions of those who provide important services in hospitals, municipal offices, and day-care centres are structured is ultimately an issue for society at large. For it is ultimately upon this basis that the young person entering the workforce decides whether to take up a job as a bus driver in public transportation or as a mechatronics engineer in the metal industry.

Today, many are already experiencing the effects of staff shortages and run-down public infrastructure. We are stranded for hours on end on a high-speed train because another ramshackle train has broken down and blocked the route, and we are afraid of being hospitalized because the low staffing levels at hospitals present dangers to both life and limb.

In light of the escalating wage dispute, it is time to begin forming a coalition dedicated to defending and expanding the public sector in Germany. To this end, social movements, initiatives, climate activists, and left-wing parties must actively side with the workers, since ultimately — given their power to strike and the particular way in which the crisis impacts them — they are the ones who will make up the nucleus of any assertive movement that aims to provide high-quality public services.

The determined collective bargaining campaign and the large warning strikes have set some things in motion. In the future, it will be necessary to continue to build upon the unions’ increasing social relevance, their newfound capacity to engage in conflict, and the experience gained in forming coalitions whilst engaging in common social struggles.