Socialist Worker

Mass anger against pay cuts

Issue No. 1701


Mass anger against pay cuts

PUBLIC SECTOR unions in Germany were locked in talks with the government over possible pay strikes as Socialist Worker went to press. The unions represent over three million workers. The last major public sector strikes in Germany were in 1992, under the Tory government of Helmut Kohl.

Rubbish piled up in the street, public transport ground to a halt and other services were hit for 11 days. This time workers are protesting against a government led by the Social Democratic Party (SPD), equivalent to the Labour Party in Britain.

The �TV and DAG public sector unions voted heavily for strikes. This followed strike votes by the teachers' union and the police union. Union leaders are under great pressure to fight for a 5 percent pay increase. Members of the �TV and DAG overruled their leaders, who recommended accepting a smaller pay rise.

The votes have thrown the government, a coalition between the SPD and the Greens, into panic. German leader Gerhard Schr�der has fought to hold wages down over the last two years. He has tried, like Tony Blair, to woo big business. But he has been forced to take account of the bitterness of German workers who see a recovery and rising profits for major corporations while unemployment remains high and wages are held down.

So Schr�der had to step in last year to stave off tens of thousands of job losses in the construction industry after a major company went bankrupt. The public sector workers' campaign strikes at the heart of the government's careful balancing act.

If Schr�der bends towards the unions, he will generate opposition from big business. But if he takes on the public sector workers, he risks alienating working class support, which the SPD has only just begun to regain. He was hoping union leaders could sell a compromise deal to save him having to come down on one side or the other.

Schr�der is pushing a programme of tax cuts through the German parliament. It will reduce the top rate of income tax from 51 percent to 45 percent and slash taxes on company profits. The government has also launched a major assault on pensions. It wants to raise pension contributions to 22 percent of earnings while cutting pension payouts from 70 percent to 64 percent of average earnings. It is looking to force people to retire later.

The Tory CDU has tried to tap into the disillusionment these Thatcherite policies have created. It has swung sharply to the right and tried to win support by scapegoating asylum seekers in a recent important regional election. But the Tories have not broken through. The mood of public sector workers shows the potential for a focus to the left of the government.

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Sat 17 Jun 2000, 00:00 BST
Issue No. 1701
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