Study proves: Privatisation causes wage dumping

On the study by the Institute of Social and Economic Research in the Hans-Böckler-Stiftung (WSI) on real wage developments in Germany to be published tomorrow , Sahra Wagenknecht, member of the executive of the party THE LEFT and of the European Parliament, declares:

The poorest quarter of wage earners in 2006 earned roughly 14 percent less than 10 years ago. In no other European country has the low-wage sector grown as rapidly as in Germany. Even during the recent recovery, the dumping wages were lowered further; in East Germany by a full 10 percent.

What is responsible for this unparalleled wage dumping is, on the one hand, the privatisation and de-regulation policy that is accompanied by mass layoffs as well as the conversion of regular jobs into low-wage jobs. A good example of this policy is provided by the Bertelsmann subsidiary Arvato which after the take-over of a Potsdam call-center from German Telekom now tries to push through wage reductions of up to 30 percent. Next to the privatisation policy, the study by the WSI, however, also criticises the lack of a legal minimum wage that has fatal consequences mainly in sectors where trade unions are weak. Added to that is the fact that the pressure on the employees to accept any badly paid job has enormously increased as a result of the Hartz unemployment laws.

The conclusions of the study are unambiguous: privatisations need to be stopped; in deregulated sectors as well generally binding collective bargaining agreements need to apply ; Hartz IV (the lowered unemployment compensation after one year of joblessness, t.n.) needs to be abolished and a country-wide legal minimum wage needs to be introduced.

Sahra Wagenknecht
Brussels, 26 August 2008