Date: Sat, 20 Jan 1996 08:45:12 -0800
Sender: Progressive News & Views List <PNEWS-L@SJUVM.STJOHNS.EDU>
Subject: 960129-Fewer jobs in Germany
/* Written 5:29 PM Jan 19, 1996 by plink in igc:militant.news */
/* ---------- "960129-Fewer jobs in Germany" ---------- */
Title: 960129-10--Fewer Jobs In Germany As Econonmy Slips
German economic gloom grows, declared the front page of the
Financial Times January 10. Newly released figures show that just two
years into an upturn in the business cycle, Bonn is facing stagnation,
growing unemployment, and a record number of insolvencies. The German
economy is now just shy of an official recession. On this news, the
value of the German mark slid against the U.S. dollar and other
The official jobless rate jumped to 9.9 percent in December, up from 9.3 percent the previous month. Nearly 4 million workers are unemployed in Germany, with another 2 million getting by on government-funded work programs. Many of the unemployed don't show up in the statistics, including older workers who have been pushed to take early retirement and the high percentage of women who have been laid off.
The same day the December unemployment figures were released, private economists announced that the German economy contracted by as much as 1 percent in the fourth quarter of 1995. The growth rate was zero in the third quarter. The German Institute for Economic Research in Berlin, known as DIW, issued a report projecting a mere 1 percent growth rate for 1996. Business insolvencies were up 11.3 percent in October, compared to September, and are projected to total a record 28,000 in 1995.
The employers and government have intensified their attacks on
workers' wages, conditions, and social benefits, blaming the
economic pinch. Klaus Murmann, head of the bosses' association
BDA, floated a demand January 2 for what he called a
three-pillar system of wage agreements. The scheme called for
workers' pay to be based not on an industry-wide standard, but on
each company's profits and individual workers'
performance. Union officials denounced the plan as
Murmann's probe came less than two months after the labor
officialdom offered an
alliance for jobs that would freeze real
wages in return for the employers' pledge to create 330,000 jobs
over three years. German chancellor Helmut Kohl welcomed the
concession plan. He is scheduled to meet with union officials and the
bosses' representatives later in January.
alliance for jobs pact was first proposed by the president
of IG Metall, the metalworkers union. The industry bosses, through
their Gesamtmetall association, countered with a
emergency program that includes holding the line on pay, lower
wages for new hires, more
flexibility in work schedules, and
less industry-wide bargaining. The DIW joined the chorus, urging IG
to renegotiate the generous pay and conditions agreed for
the metalworking industry this year, as the Financial Times put
Thirty thousand metalworkers struck in eastern Germany, and 200,000 workers demonstrated across the country, in 1993 to demand the national wage parity that was promised following reunification of the country.
Other economic figures released in January showed Germany's budget deficit stood at 3.6 percent of economic output, 0.6 percent higher than the European Union ceiling set by the Maastricht treaty. German finance minister Theo Waigel vowed January 9 that this year Bonn would come in under the 3 percent mark. The deficit limit is a requirement for joining the European Monetary Union that is supposed to begin in 1999.
Waigel blamed the deficit on overly high spending by state governments and on the cost of the social security network. He said the federal government will attempt to impose a moratorium on higher spending by the state administrations this year, and will push to privatize public sector industries such as water, garbage collection, and electricity.
Unemployment in eastern Germany continues to be much higher than in the west. The official jobless rate is nearly 15 percent there, and the actual rate considerably higher. Only 35 percent of east Germans have a regular, full-time job.
While the business press has bragged of somewhat faster growth of the economy in east Germany, the figures are illusory. In large part it is based on a construction boom that followed the reunification of Germany in 1990, which is largely exhausted. Much to the dismay of big business in Germany, stable capitalist property relations have not taken hold in the east German workers state.
Industrial output has collapsed in the region. In eastern Berlin, for
example, which has a population of 1.3 million, the number of
industrial jobs has dropped from 180,000 to 33,000 in the last six
years. The Treuhand privatization agency has closed or
restructured many enterprises deemed by potential capitalist
investors as incapable of making a sufficient profit. Charged with
selling off some 8,000 enterprises—from which the capitalists in
west Germany projected a profit bonanza—the Treuhand has come
out 270 billion marks in the red, dragging down the German economy as
Bonn's economic crisis, which follows massive protests by workers
in France against the government austerity drive there, has the ruling
classes throughout Europe worried. There are now 14 million workers
unemployed in Europe. A business article in the January 10 New York
European nations risk a kind of social problem not
seen in decades—structural poverty and the threat of social
Stefan Schneider, an investment economist in Frankfurt, told the Wall
Technically we aren't in a recession and we
aren't going to get one. But we're damn close.