German Rail Strike Threatened

March 9th, 2011
in econ_news

German trains Econintersect:  On Monday, the train drivers' union GDL voted in favor of unlimited strikes as part of an ongoing pay dispute between the union, Deutsche Bahn and several private rail companies in Germany. GDL did not provide details regarding the looming work stoppages, but union head Claus Weselsky said before the vote that strikes could begin later this week.

The union, to which some 75 percent of German train drivers belong, is demanding a single pay scale for all its members -- a demand primarily aimed at the country's private rail companies, which pay up to 30 percent less than Deutsche Bahn. The union has targeted Germany's national rail company as a way of creating leverage. Warning strikes last week left thousands of travelers stranded for the two-and-a-half hour duration of the stoppage.

Follow up:

From Der Spiegel:

"GDL must be cognizant of the effects such a strike could have on the entire economy," warned Transportation Minister Peter Ramsauer, who has so far declined to play a mediation role in the conflict, in an interview with the conservative daily Die Welt, to be published on Tuesday. He urged the union not to "hold Deutsche Bahn hostage" and to avoid pursuing the conflict "at the expense of passengers."

Economists in Germany are concerned that the rail strikes could merely be the tip of the labor conflict iceberg this year. After years of stagnating wages, the result of labor market reform followed by economic recession, workers in the country appear to be losing their patience. The union representing German chemical workers, the IG BCE, is demanding a 7 percent wage increase for its 550,000 members; the construction union IG Bau, which represents 700,000 people, is calling for a 5.9 percent raise; and Ver.di, which represents civil servants, is demanding 5 percent more for its 600,000 members who work for German states -- despite empty public coffers.

Perhaps not surprisingly, the head of the Association of German Employers, Dieter Hundt, has warned unions to scale down their demands, saying they "come from the cuckoo clock in the sky and are completely delusional."

But warnings have come from elsewhere as well. Dennis Snower, president of the Kiel Institute for the World Economy, told the business daily Handelsblatt that "now is not the time to pursue an expansive wage strategy. We don't know how sustainable the economic recovery is."

Source:  Der Spiegel

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