Dhe whole Easter holidays they sat together, the mediators of the civil service. They fought for percentage salary increases, flat-rate surcharges and one-off payments, as well as terms and forecast inflation rates, with the threat of new strikes lurking in the background. Above all, however, there was always one topic that was important far beyond the current wage round: the question of whether the public sector actually earns better or worse than in the private sector, which wage groups this affects and what that means in times of labor shortages.
The trade unions argue primarily with the needs of the lower wage groups, which are their most important clientele. Caring for the sick or taking out the rubbish, driving the subway or putting out fires: these are all socially important tasks, often in shift work, and certainly not paid princely. But is it true that the public purse keeps them so short?
The tendency is for relatively simple jobs to be paid better by the state than by companies, says Bernd Fitzenberger, President of the Institute for Labor Market and Vocational Research, which is part of the Federal Employment Agency. In jobs that require higher qualifications, on the other hand, more can usually be earned in the private sector. An example of this are judges, who also have a good income in the civil service, but could earn much more as lawyers with very good exams in the private sector.
Public service has become more attractive
The civil service compensates for the disadvantage in terms of salaries with other benefits in such professions. According to Fitzenberger, the public service can score with “higher predictability and job security”. But regular working hours and a better work-life balance are also advantages, especially ones that have become more attractive to younger people in recent years. The pandemic gave this shift in priorities a boost.
Nevertheless, employers argue that this is not enough. Another reason why they are so hesitant to consider the low salary brackets with high premiums is because they have more problems recruiting more highly qualified staff. The much-criticised planning backlog in public projects is not only due to objections from citizens or complicated bureaucratic procedures. Existing money is often left behind because there is a lack of staff in the responsible offices. Economics Minister Robert Habeck can enact as many laws to speed up planning as you like – without a civil engineer in the authority, nothing often works. The faltering digitization is not only caused by misgivings in the offices, but also by the difficulty of recruiting good IT specialists for the public sector.
On average, the public service is in a better position. In the past, however, this wage gap was relatively small in Germany compared to other countries, as an analysis by the Bonn Institute for the Study of Labor (IZA) showed some time ago. According to the IZA, the difference would be largely evened out over the entire lifetime.
Inflation eats up wage gains
Figures from the Federal Statistical Office show that collective wages in the public sector rose by 15.1 percent between 2015 and 2022. That is even slightly more than the average for all sectors of the economy, which is 15 percent. The lowest earnings in the collective agreement for employees in the federal states have been 2094 euros since December, the highest 7042 euros. Since 2019 there has also been no difference in collective wages between East and West Germany.
However, as in the private sector, last year’s high inflation leveled out real wage gains. Since 2015, consumer prices have risen by a total of 16 percent. Hagen Lesch, labor market expert at the employer-related Institute of German Business (IW), expressed skepticism about the demands of the trade unionists. A noteworthy deficit can be observed “only in comparison to the best-paying industrial sectors – metal and chemicals”, writes Lesch in the specialist journal “Wirtschaftsdienst”.
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