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DGB boss Fahimi on the current wage round, inflation and bankruptcies


The current collective bargaining rounds are marked by hardened fronts and a wave of warning strikes. In an interview, DGB boss Fahimi explains why that is and why a democracy has to endure it. Ms. Fahimi, that was a pretty bitter week for the employees of the department store group Galeria Karstadt Kaufhof. Once again, it has to be said – dozens of branches are to be closed, thousands of employees will lose their jobs. In the end, who is to blame?

Yasmin Fahimi: The truth is that the man behind it, René Benko, is nothing more than a real estate speculator who has no interest in the actual department store business. And who was also unwilling to keep his promise to modernize the houses. All this against the background that the state already helped with 460 million euros in 2021. This makes it clear that we have to tie government aid to conditions much more closely if it is to flow. Don’t you also see that politicians or the local authorities share some of the responsibility for the disaster because they always played along – for fear that the inner cities would become deserted?

Fahimi: There are always great efforts by politicians to maintain life in the inner cities and to secure jobs. First of all, these are correct and understandable goals. However, if you have a partner on the other side of the table who doesn’t play the game in the end, who doesn’t keep his promises and commitments, then you realize that there are unfortunately cases like this from which you learn that you can to make more binding agreements. Should this have been done much earlier in this case?

Fahimi: It’s difficult to say in hindsight, because in the situation at the time, a lot of things came together. The chain was already in crisis, having entered the pandemic phase in the red. That wasn’t just due to the pandemic. And to make a decision in the middle of the pandemic to simply close many branches and throw thousands of employees onto the streets would have sent the wrong signal, I think. The trade union ver.di has also announced that it will continue to fight for every branch – but hasn’t it slowly come to the point where you have to say that “keep it up” in this context might not help at all?

Fahimi: Ver.di is already highly alarmed with regard to what reliable commitments it can actually get. But that’s why it’s still right to fight for every branch, because it’s about jobs.

Demand for shorter terms “understandable” Your unions are currently conducting a series of collective bargaining negotiations, all of which are likely to be difficult – also because you are making very high demands to compensate for inflation for employees: 10.5 percent in the public sector, twelve percent in the railway sector – that’s still realistic ?

Fahimi: They are necessary. And as you saw at the end of the post, they are not unrealistic at all. We have to see that there is a need to catch up from 2022 with a record inflation, as well as a forward-looking perspective, because this year inflation will not exactly fall to two or three percent again. And when you add that up, it’s extremely reasonable. How long-term are the current negotiations? All only for twelve months? Then we might be threatened with the next strikes in a year?

Fahimi: That’s a matter for the parties to the collective agreement, I can’t say much about that. However, I believe that the basic attitude of not wanting to make collective agreements with very long terms is understandable. Because no one can foresee what will happen this year or, above all, next year. In this respect, everyone would actually be well advised to make a sensible and solid conclusion now and then look at the situation again next year.

“This goes to the roots of democracy” The railway and transport union, the EVG, has already rejected the first offer from the railways this week. And one also hears that on March 27, together with ver.di, it could possibly paralyze traffic in Germany to a large extent. Will it really come to this?

Fahimi: We’ll see. First of all, these are separate collective bargaining agreements, but they just fall into similar windows in terms of time. In this respect, of course, it cannot be ruled out. The offer of the railway is really unacceptable. Over such a long period of time, only offering three percent at the end of the year and then two percent again next year – that’s really almost a mockery. But do you really think it is proportionate that the transport sector could actually go on strike completely?

Fahimi: Everyone has to adjust to that. In a democracy, you have to live with the fact that there are also strikes. This is a fundamental principle, a foundation of our democracy. We have a very limited right to strike in Germany anyway. Unlike in France, for example, we could not carry out political strikes over a pension reform by the federal government. And you have to live with that. I can only advise against speculating whether the right to strike shouldn’t be restricted in Germany. You allude to the corresponding demands of the employers’ associations. They criticize that the trade unions have lost measure and center in view of the warning strikes that have accumulated in recent weeks.

Fahimi: Unfortunately, we have to build up more pressure at the moment because there is simply a lot at stake. The fact that we are dealing with what feels like a relatively large number of days of warning strikes is simply due to the fact that a lot of collective bargaining from very different sectors is happening at the same time. That’s so. Overall, however, Germany is a low-strike country. In a European, international comparison, we have extremely few strikes. In this respect, it is an attempt to create a mood against the right to strike, which I find really problematic. Because you’re moving into very dangerous territory, where it’s about civil rights and to philosophize about it a bit now, whether something shouldn’t be restricted, goes to the roots of our democracy. And there will also be a corresponding answer to it. How could that turn out?

Fahimi: If someone actually seriously thinks about taking up the right to strike, then it will certainly not be difficult for us to mobilize many thousands of people who will clearly demand their citizenship rights.

Profit-price spiral, not a wage-price spiral? From an economic point of view, the fear is repeatedly expressed that high wage agreements could trigger a wage-price spiral. Don’t you see it that way?

Fahimi: No. Incidentally, this was also confirmed to us last year during the first concerted action by the Bundesbank and the German Council of Economic Experts. That inflation – last year as well as this year – is due to high energy prices and disrupted supply chains, not wage developments. In this respect, I wish that this debate would simply be ended now. What we’ve actually observed over the last year is a profit-price spiral. This means that the corresponding costs – from energy, for example – have simply been passed on to the customers and as a result prices have risen, while the company’s profits have remained the same or even increased. Do you welcome the fact that these profits are now to be skimmed off?

Fahimi: That is exactly right. However, how efficiently this can be achieved is another question. Are you not very confident?

Fahimi: It is becoming apparent that the energy market of the past no longer works and that we need a new energy market design. In this respect, I am cautiously optimistic that there is now a willingness to think about how we can get inflation under control, particularly with regard to energy prices. But to do this, you have to move a lot of levers in Germany and also at EU level. I consider that to be an essential task. Another challenge will undoubtedly be the shortage of skilled workers – and with it the issue of education. However, the federal government’s education summit this week did not bring any concrete results. Were you personally disappointed?

Fahimi: I am really disappointed that the Conference of Ministers of Education simply does not succeed in really discussing very fundamental reforms. Regardless of their party political color, all of the states maintain that they want to be 100 percent responsible. Unfortunately, they fail in cooperation with each other and in the success of a better education system in Germany. Far too many students leave school without a degree. The fact that we are complaining about a shortage of skilled workers in Germany is downright bizarre.

The interview was conducted by Jim-Bob Nickschas, ARD capital studio, for the SWR interview of the week.

SWR Aktuell: DGB boss Yasmin Fahimi in conversation with Jim-Bob Nickschas

3/18/2023 2:26 p.m