Much to learn from Germany on industry and skills
Last week I was one of a number of trade union officials and shop stewards who took part in a visit to Germany to look at training and skills. We went with Skills Minister John Hayes MP and representatives of BIS and the UK Commission For Employment and Skills. The delegation visited the Siemens plant in Lincoln, UK and Siemens’ giant training facility and manufacturing site in Berlin.
We were also able to meet officials from a number of German training organisations – and of course trade union representatives from IG Metall, Germany’s biggest union and the TUC equivalent – the DGB. The latter meetings gave us an opportunity to discuss and assess the state of German unions and the overall economic situation in the EU’s powerhouse economy.
First off, the German trade union movement is in good heart. IG Metall the main manufacturing union has launched a campaign for a 6.5% pay increase, for 12 months; permanent positions and protection for agency workers and proposals to create jobs for young people.
Union reps we met, including shop floor comrades, pointed out that the German economy grew by 0.4% in the second quarter of 2012. The German government has also published a positive official growth forecast for 2012. Unemployment has fallen to a record low of 6.7% and union membership is growing again.
They were also buoyed up by the recent success of the services and skills union Ver.di who won German public sector workers a pay deal of 6.3% albeit over a 24-month period – a deal German Finance Minister Wolfgang Schaeuble, called ‘a reasonable outcome’ although it went ‘to the outer limits of what the federal government and communities can afford’.
Overall, wages for nine million German workers are up for negotiation this year. Union members argue rightly that following the years of pay restraint their time has come – and pay increases can be afforded. They also point out that German bosses have been winning big pay deals. Last year the CEOs of Germany’s Top 30 companies saw their pay rise 9% to the highest level for five year.
One thing was also clear to us. Germany is doing better because it was less vulnerable when the financial tsunami hit Europe as it was able to fall back on its rigorous tax system to balance the books without taking an axe social security.
Germany has also boosted exports which injected capital into the economy. The country is ranked eighth in the latest Global Manufacturing Competitiveness Index. The UK limps in at 17th position. That’s because Germany also focuses on medium sized manufacturing firms (known as Mittelstand), providing help to them, and by protecting their interests. Training based on the dual system of education and ongoing training prepares young workers to work – as they say – “in the real world” and develops transferable skills, making workers more adaptable. The system is well supported by German unions.
Of course Germans are taxed more but they have high spending power, and they kept them spending through the economic crisis. The German government have just released figures indicating that purchasing power will rise by 3% this year.
One other key factor is that German workers are informed and consulted about company plans and performance through the structure of works councils. German unions are listened to and as the crisis engulfed the world, the German unions were publicly consulted as by Chancellor Angela Merkel. As one DGB officials said: “A smart move – the discussions were very public – it’s showed that unions are respected”.
All this was in contrast to the UK experience (which our German hosts wanted to discuss at length!) of a one trick pony coalition with one mantra – austerity, austerity and more austerity – and bash the workers into the bargain.
We have much to learn!
GUEST POST: Tony Burke is Assistant General Secretary of Unite the Union.