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Working In These Times

Tuesday, Feb 10, 2015, 3:08 pm

Germany Just Passed Its First-Ever Minimum Wage Law—And It Covers Interns

BY Amien Essif

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A German member of parliament explains his country's major recent labor law changes on the minimum wage, unpaid internships and temp jobs. (Runemaker / Flickr)  

To American observers, the news that Germany passed its first-ever minimum wage law in July is probably shocking. Germany is the country of the “works council,” where employees sit next to employers on boards of giant companies and half of all workers are covered by collective bargaining agreements. So why did it take the country so long to implement a basic protection that the U.S. has had since the days of Franklin Roosevelt?

In These Times spoke about working conditions in Germany with Matthias Bartke, member of the German parliament from the Social Democratic Party (SDP), which currently shares power in a coalition government with Angela Merkel’s Christian Democratic Union (CDU). Bartke, member since 2013, serves on the Committee for Labor and Social Affairs, where he helped craft the minimum wage legislation that took effect in January despite challenges from the private sector—a “historical” achievement, in Bartke’s words.

What were some of the barriers to passing a minimum wage for Germany? Why now, after so many years without one?

We used to have really strong unions. They are not as strong anymore as they used to be. The rate of union membership is really going down. The unions once said, "It’s not the business of the government to set a minimum wage—it is our business." But about ten years ago, they decided they weren’t succeeding. Especially after the re-unification between West and East Germany [in 1990 after the fall of the Berlin Wall], we had very low wages.

The barbers in Thüringen, they had a minimum wage of 3.18 euros per hour [before the minimum wage law took effect], which is ridiculous. If you earn this very low wage, you go to the social welfare office, and they have to pay you. 

It took time to pass the minimum wage, but it was a real cooperation between the SDP and the labor unions. And in this legislative period, it is the most important thing that we did. The conservatives knew that they wouldn’t have a coalition with us without the minimum wage. But I have to say that it was not a small part of the CDU who also wanted the minimum wage.

There were some exceptions in the law, which were not really good, but were also not really that important. So the Greens in the Parliament said that the exceptions were really horrible, but in the end they agreed. But the Left Party [Die Linke] said that the exceptions were so bad that they couldn’t agree, so they abstained from voting. It’s ridiculous! The passage of a minimum wage law is historical, and the Left Party was against it.

In the U.S., we have had a minimum wage since 1938, but very often inflation cuts the legs out from under it, and the political struggle has to start all over again. What has the SPD done to anticipate this problem in Germany?

We have a committee headed by the former mayor of Hamburg, Henning Voscherau, which raises the minimum wage every year to compensate for inflation. But we don’t have any inflation right now! So it will probably only be 8.50 or 8.60 euros next year.

It was a big struggle to get the minimum wage, and we don’t want this struggle every year again. That would not be nice! It was amazing the letters I got: “Germany will go down to hell if we get a minimum wage.” [Laughs.] But I don’t think that will happen.

Why did the SPD wish to include internships in the minimum-wage law?

There was quite a debate, and that’s a difficult thing. We have what we call “Generation Internship,” because when we have unemployment, many companies just say "Well, come to us and do an internship," and the intern doesn’t get any money, hoping that they get a job after it. Sometimes it works, and sometimes not. And so you can work for years as an intern, and that’s not okay. We wanted to stop that—stop Generation Internship.

But it’s a very restricted law we have now for interns, and I don’t know if it’s really that good. But we shall see how the whole thing works, and after one year we will come together and think about the good parts and the bad parts, and perhaps there will be some changes.

I don’t think that we will change very much about the law, though, because when you change one thing, the opposition wants to change everything.

How would you respond to the criticism that implementing a minimum wage for interns will cause a decline in the availability of internships?

That’s probably not very wrong, but we didn’t see any other possibility to solve the problem other than to extend the minimum wage to internships. But we allowed exceptions. For example, when you have to do an internship as a part of your education, you don’t have to be paid minimum wage.

But actually, I think 8.50 is okay. When a company is not willing to pay 8.50, I think they are trying to exploit the young people.

In 2013, there was a clash between the German and the American attitudes toward labor. Despite cooperation from Volkswagen, the United Auto Workers labor union was unable to win a vote to represent workers at a Chattanooga, Tennessee, factory, partly because local lawmakers fought the union drive. Could you explain the German attitude and how it affects workers in Germany?

In Germany, you have to differentiate between the different categories of unions. In the automobile industry, we have very strong unions, and they work very well together with the companies, especially in Baden-Württemberg at the big plants like Mercedes-Benz and Porsche.

Lower Saxony has Volkswagen, and Volkswagen has a super strong union. Nobody at Volkswagen can succeed if he doesn’t have the support of the union. So it’s no wonder Volkswagen wants a union [in Chattanooga], because they’ve had a very good experience working together [in Germany].

Perhaps that is one of the most important factors in the success of the German economy that we have a thing we call Sozialpartnerschaft [social partnership], the working together of the employer and the unions. And we had very few—or we used to have very few—strikes.

There is, of course, an antagonism between the interests of the employees and the employers, but I think the employers also know that they will succeed when the workers are happy.

Amazon is one U.S. company that has upset German unions by refusing to negotiate. Do you believe that Amazon “challenges the foundations of the traditional German model of industrial relations," as one commentator recently put it? What can the government do to help Amazon workers?

When I speak about the big automobile factories and their unions, that is a very good example of social partnership. But of course we have in Germany other companies who are taking the route of confrontation. So Amazon is not at all an exception. 

I don’t think it is a good idea what Amazon does. They’ve struggled with the unions for a long time now, and I don’t think it’s very clever.

And that’s not the only problem we have with Amazon. They also have their [European] headquarters in Luxembourg in order not to pay as much in taxes, and that is a problem we are discussing now in Europe: companies like Apple and Google conducting business in Germany but headquartering in countries where they don’t have to pay German taxes.

Many U.S. employers are transforming good, salaried jobs with benefits into “independent contractor” jobs, meaning that the worker is not an employee and is not entitled to rights or benefits like the minimum wage. Is there a similar problem in Germany affecting a new generation of workers?

After Agenda 2010 [reforms passed in 2003 that pared down labor law including restrictions on temporary work], the use of temporary workers really exploded. I think in 2012 we had almost one million temp workers, and we still have some 700,000 or 800,000.

There was a report on a leading German national television program about this temporary worker who was sent to Daimler [automobile plant], where he did the same thing as the employees but got a third of the wage. And then he got sick and went to the company doctor and the doctor said, "No, you’re not working for us. I’m only responsible for Daimler workers."

It was a really big story. After that, there was a debate with a bishop, a union representative and a company representative. And then there was a special debate with Angela Merkel and one guy [from the audience] said, "Well, I’ve actually been working for 12 years at one company, but I’m not an employee of the company. I’m a temporary worker." And you could see Angela Merkel—her face! She didn’t know that was possible.

That was not okay, so we agreed in our [coalition] negotiations with CDU to make a law about temporary workers.

My opinion is that temp workers got into the focus of the debate, and so many companies changed their strategy to use independent contractors. That’s the new thing, and it's really difficult, because it is judicially hard to control.

About two years ago at a big shipyard plant in Papenburg, some barracks burned and two people died. It turned out that those people were independent contractors from Romania and they were earning very little money. And the whole thing started a controversy.

Our Ministry of Labour [headed by the SDP] is working on a law to control the use of independent contractors. But this is much more difficult than the temporary workers, because those independent contractors are also necessary for the economy to work, and you cannot say that everybody is getting the same wage.

In the past few years, there has been an increase in anti-immigrant and anti-Muslim politics in Germany. Recently, the far-right group PEGIDA has been organizing protests in Dresden against the supposed “Islamisation” of Europe, some of which have drawn thousands. What is the SDP doing to counter groups like PEGIDA?

It’s a very interesting thing, perhaps, about human nature that people are against things they do not know, they’ve never met. Our attitude [in SDP] is actually, I think, what a politician must have. You have to speak to those people who hold these opinions. We have the idea that we do not speak with the people who organized the whole thing, the officials of PEGIDA, but we have to speak to the others to convince them. Of course it’s not easy because when you speak about Islamophobia you have to deal very much with emotions and not very much with the intellect. And to get through those emotions, it’s not easy.

What about within the labor movement? Is there division within the ranks of unions about the role of immigrants, especially Muslim immigrants, in the German economy?

The traditional idea is that when you are on the Left, and you are a union man, you are an internationalist. That was never true. When I go to the Social Democratic Party events and I speak to the people, some of them have some prejudices against foreign people. Those things happen. But it is not a real problem on the Left. I don’t think it is a problem within the unions, and it is not a problem within the SPD. When you’re in the pub with people, you sometimes hear those sentiments. But I don’t think it’s very common.

Amien Essif is a regular contributor to Working In These Times and maintains a blog called The Gazine, which focuses on consumerism, gentrification, and technology with a Luddite bent. His work has also appeared on the Guardian and CounterPunch. You can find him using Twitter reluctantly: @AmienChicago

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