Coming Challenges Stockholm, 14. September 2011 Prof. Dr. Michael Hüther - Ratio

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Coming Challenges Stockholm, 14. September 2011 Prof. Dr. Michael Hüther - Ratio
Coming Challenges

Stockholm, 14. September 2011
Prof. Dr. Michael Hüther
Agenda

   SHORTAGE OF WELL TRAINED LABOUR

   THE POTENTIAL OF MIGRANTS

   THE ROLE OF WAGES AND UNIONS

Stockholm, 14. September 2011        2
A shrinking and ageing population

 90
                                                             82,0
 80
        68,7
                                  Population, in                                                  64,7
 70
                                  millions
 60
                                                                                                 50,4
 50                                                         43,4
                  Average age, in years
 40     34,4

 30                                                                                               34,0
 20
                                                             20,4
        16,2       Share of over-65-year-olds,
 10
                   in per cent
   0
         1950       1960        1970   1980    1991     2008         2020   2030   2040   2050   2060

Source: StBA; Var. 1-W1 der 12. koordinierten BVB; IW-Berechnungen
Stockholm, 14. September 2011                                                                            3
Demography: The long run
Population by qualification and age, 2009, Germany, in thousands
             qualification unknown           children under 15 yo                  without professional qualification
             with professional education     with University / FH degree           coming 5-year cohort
             gap

  14.000

  12.000                                                                                   2.104
                                                                           2.331
  10.000                         4.902
                                             112
                                                          1.888                                             1.590
   8.000                                    2.137

   6.000                                                                   8.289           8.634
                                                          5.736                                             6.489
   4.000                         7.694      7.102
   2.000          3.445
                                                          2.037            1.786           1.858            1.663
         0
                  0 to 4        5 to 14    15 to 24     25 to 34        35 to 44         45 to 54         55 to 64
                  years          years      years        years           years            years            years

                                                                  Source: Statistisches Bundesamt 2010, eigene Berechnungen

Stockholm, 14. September 2011                                                                                            4
Right now, engineers are scarce in Germany
Difference between job vacancies and unemployed
               other engineers                                other production engineers
               mining and metallurgical engineers             geodesists
               architects, construction engineers             electrical engineers
               machine and vehicle construction engineers
 80 000
 70 000
 60 000
 50 000
 40 000
 30 000
 20 000
 10 000
        0
        Aug 00 Aug 01 Aug 02 Aug 03 Aug 04 Aug 05 Aug 06 Aug 07 Aug 08 Aug 09 Aug 10

                                                    Source: Bundesagentur für Arbeit, Institut der deutschen Wirtschaft Köln
Stockholm, 14. September 2011                                                                                                  5
Agenda

   SHORTAGE OF WELL TRAINED LABOUR

   THE POTENTIAL OF MIGRANTS

   THE ROLE OF WAGES AND UNIONS

Stockholm, 14. September 2011        6
Net migration has been no help
Immigration to and emigration from Germany, in thousands
  1 500

  1 000                                                           Immigration

    500

       0
                                                         Net migration
   -500

                                Emigration
 -1 000

 -1 500
         1950               1960         1970   1980   1990         2000            2010
                                                              Source: Statistisches Bundesamt
Stockholm, 14. September 2011                                                              7
Qualified immigration is too small to matter
Migration from third countries
                                requirements:
                                                                                 Influx in 2009
                                Job offer + ...
                                professional training or university
                                                                                     14.816
Employment                      studies
§18 AufenthG                    Without professional training or
                                                                                     8.408
                                university studies

                             - excellent scientific performance or
Highly qualified workers and
                             specific job experience which results in
   researchers                                                                         311
                             a wage of at least €66.000 special
§§ 19, 20 AufenthG
                             research appointments

Self employed                   Among others: Investment of at least
                                                                                     1.024
§ 21 AufenthG                   €250.000 + creation of 5 jobs

                                                  Total qualified immigration:       16.151
                                                                        Sourcen: BAMF, IW Köln
Stockholm, 14. September 2011                                                                     8
Potential today: Validation of foreign
educational achievements
                                 engineering                                                       1247

                         law, social sciences                           580

           languages, cultural sciences                      294

  agrary, forestal, nutritional studies                     274

                                   medicine                229

                                          art        114

              mathematics and sciences               112

                                      others        81

                                                0    200         400   600    800   1000    1200      1400

                                                                                    Source: Mikrozensus, 2009
Stockholm, 14. September 2011                                                                                9
Potential tomorrow: migrants‘ descendants
Share of persons with migration background of total population
  40%

  35%

  30%

  25%

  20%

  15%

  10%

   5%

   0%
           under 5          5-15    15-25          25-35   35-45   45-55   55-65    > 65
            years          years    years          years   years   years   years   years

Source: Statistisches Bundesamt/Mikrozensus 2009

Stockholm, 14. September 2011                                                              10
Need for better education and integration
Labour market integration of immigrants
                 People with migration background              People without migration background

                                                                                    62%
                          labour force potential
                                                                                  58%
                                                                                                       87%
                                employment rate
                                                                                                         93%
                                                               21%
 Recipients of ALG I/II among labour force
                                                        9%
                                                        10%
           unemployment of highly qualified
                                                   3%
                                                     12%
         unemployment of medium qualified
                                                    8%
                                                               19%
               unemployment of low qualified
                                                             15%

                                                                                   Source: IW Köln, Mikrozensus 2009

Stockholm, 14. September 2011                                                                                   11
Agenda

   SHORTAGE OF WELL TRAINED LABOUR

   THE POTENTIAL OF MIGRANTS

   THE ROLE OF WAGES AND UNIONS

Stockholm, 14. September 2011        12
Minimum wages

 A general legal minimum wage is still in discussion. Its proponents see
  it as a means to reduce the number of „working poor“

 At the moment, Germany has legally introduced sectoral minimum
  wages in several sectors of the economy

 Problems:
   High control costs due to segmented application

   Outside competition (by firms that do not sign tariff agreements) ceases to exist, this
    lessens the need for wage moderation

   Workers with a productivity less than the minimum wage are in danger to become
    unemployed

Stockholm, 14. September 2011                                                                 13
Minimum wages in several sectors
 Sector                              Number of concerned   Minimum wages in Euros
                                     employees

  Special operations in black coal   2.000                 11,53 bis 12,81
  mines
  Roofing                            84.000                10,80

  Construction                       678.000               9,75 bis 13,00

  Painting Services                  110.000               9,75 bis 11,75

  Electric Services                  310.000               8,65 bis 9,80

  Waste management                   175.000               8,24

  Elderly care                       630.000               7,75 bis 8,75

  Building cleaning                  830.000               7,00 bis 11,33

  Laundries                          30.000                6,75 bis 7,80

  Security firms                     170.000               6,53 bis 8,60
Source: BDA-Tarifarchiv
Stockholm, 14. September 2011                                                       14
A dangerous proposal: €8,50 per hour
Minimum wages in per cent of average wages
  USA
    CZ
      E
      B
    UK
 HUN
  POL
   GR
 POR
    NL
      F
     D

          20               25   30   35      40   45   50

Source: Eurostat;

Stockholm, 14. September 2011                           15
Membership structure of trade unions
Rate of unionization, 2010

            civil servants

  white collar workers

   blue collar workers

              18-29 years

              30-39 years

              40-49 years

                     50 plus

                                0   10   20   30   40   50

Stockholm, 14. September 2011                            16
Fusions of German unions

                                Gewerk-
                                 schaft
                                 Kunst

                                            IG
                                          Medien
                            IG Druck
                                           1989
                              und
                             Papier

Stockholm, 14. September 2011                      17
Fusions of German unions

                                Gartenbau,
                                Land- und
                                 Forstwirt-
                                  schaft

                                              IG Bauen-
                                                Agrar-
                                               Umwelt
                                                 1996
                                 IG Bau-
                                 Steine-
                                  Erden

Stockholm, 14. September 2011                             18
Fusions of German unions

                                   IG
                                Bergbau
                                  und
                                Energie

                                             IG
                                  IG      Bergbau,
                                Chemie-
                                Papier-   Chemie,
                                Keramik   Energie
                                            1997

                                Gewerk-
                                 schaft
                                 Leder

Stockholm, 14. September 2011                        19
Fusions of German unions

                                  IG
                                 Metall

                                G. Textil
                                             IG
                                Beklei-
                                 dung
                                            Metall
                                            2000

                                G. Holz
                                 und
                                Kunst-
                                 stoff

Stockholm, 14. September 2011                        20
Fusions of German unions

                                                     IG Medien

                                Deutsche                                   Deutsche
                                 Post-                                      Ange-
                                                                           stellten-
                                gewerk-                                    gewerk-
                                 schaft                                     schaft
                                                     Ver.di
                                                     2001

                                          G.
                                                                  G. Handel,
                                      Öffentlicher
                                                                 Banken, und
                                        Dienst,
                                                                  Versiche-
                                       Transport
                                                                   rungen
                                      und Verkehr

Stockholm, 14. September 2011                                                          21
Fusions of German unions

                             Transnet –
                            Gewerkschaft
                                der
                            Eisenbahner
                            Deutschlands

                                             Eisenbahn- und
                                             Verkehrsgewerk-
                                               schaft (2010)

                                Verkehrsge
                                werkschaft
                                  GDBA

Stockholm, 14. September 2011                                  22
Trade unions as actors in industrial relations
 A recent survey shows: 61 per cent of the interviewed want unions to
  fight for higher wages (late 1990s: 43 per cent)

 42 per cent of the interviewed believe that craft unions can enforce
  higher wages more effectively than industrial unions, only 30 believe it
  to be the other way round
   As a reaction of the important fusion resulting in ver.di (2001) several craft unions
    decided to become independent from the new conglomerate. They started to follow a
    wage policy according their own interests.

   The crafts unions of pilots, air traffic controllers, flight attendants, physicians, train
    drivers have become quite powerful

 Industrial unions are getting under pressure to rethink their strategy of
  moderate wage increases
Stockholm, 14. September 2011                                                                    23
Wage development depends on labour supply

The upward pressure on wages will be influenced by the developments
outlined before:

 The shortage of well trained labour will lead to an excess demand for
  workers, which will bring bargaining power to the employees.

This development can be mitigated by various factors:

 The successful education of the younger generation
   A special focus must lie on the education of migrants‘ descendants

 Accrediting foreign educational achievements

 A higher influx of qualified immigrants

Stockholm, 14. September 2011                                             24
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