report<\/a><\/span> in the Financial Times (FT), prominent companies, including Mercedes-Benz and toolmaker Stihl, have demanded that employees work 40 hours a week without additional pay, arguing that high labour costs are undermining the country’s competitiveness.<\/p>\nSpeaking to the Handelsblatt newspaper earlier this summer, Martin Brudermuller, chairman of the supervisory board of Mercedes-Benz Group, said, “By international standards, labour here has become too expensive,” arguing that the country had lost its “productivity advantage over key competitors.”<\/p>\n
“We must seriously consider returning to a 40-hour working week,” Brudermuller said.<\/p>\n
Labour costs in Germany are among the highest in the EU. Hourly labour costs in the manufacturing sector stand at 49.50 euros, which is 47% above the EU average of 33.70 euros and triple the cost of 15.60 euros in Hungary.<\/p>\n
Although German employees are more productive than their Eastern European counterparts, unit labour costs, which measure worker productivity, have risen significantly faster since 2023 compared with previous years, according to a study by the IMK, a think-tank funded by German trade unions.<\/p>\n
The calls to return to a 40-hour week have come ahead of industrial unions starting their latest wage negotiations in October.<\/p>\n
The 35-hour working week was phased in over more than a decade following a dispute in 1984.<\/p>\n
In that dispute, tens of thousands of metalworkers in former West Germany staged a seven-week strike to secure shorter working hours.<\/p>\n
Today, the 35-hour working week is the collectively agreed standard for approximately one-fifth of German employees, concentrated in sectors such as automotive, engineering, iron, and steel. Across all sectors, the average weekly working time is 37.8 hours.<\/p>\n
Germans work fewer average annual hours than employees in almost all other OECD economies. However, this comparison is heavily skewed by the country’s high rate of part-time employment.<\/p>\n
What has turned a decades-long debate into an urgent issue of competitiveness is the deepening crisis in the German manufacturing sector.<\/p>\n
Having peaked in late 2017, German industrial production has fallen by more than 15% as manufacturers have been hit by back-to-back energy price shocks stemming from anti-Russia sanctions, intensifying competition from China, US tariffs, and the profound shift towards electric vehicles.<\/p>\n
According to Marcus Berret, global managing director of the consultancy Roland Berger, high labour costs were once offset by Germany’s other attractive features for employers, such as political stability, strong infrastructure, a skilled workforce, and dense industrial clusters.<\/p>\n
However, these advantages have begun to erode as the cost gap with countries in Eastern Europe and beyond has widened:<\/p>\n
“When it comes to labour costs, we are not talking about a 10% or 20% gap [with rival economies]. In some cases, we are talking about a three- or fourfold difference.”<\/p>\n
So far, manufacturing employment in Germany has declined at a much slower pace; despite the sharp drop in output, approximately 6.5 million people continue to work in the sector.<\/p>\n
However, Berret predicts further job losses:<\/p>\n
“If I piece together the information I have from individual companies, I estimate that the number of people employed in manufacturing will drop to below 5 million.”<\/p>\n
Currently, around 12,000 to 15,000 manufacturing jobs are being lost each month, and major employers such as Volkswagen have already indicated that many more positions in Germany will need to be eliminated.<\/p>\n
Economists argue that longer working hours may become inevitable for employees who manage to keep their jobs.<\/p>\n
Martin Werding, a member of the German Council of Economic Experts, says that the mechanisms manufacturers once used to compensate for high labour costs, such as relying on temporary agency workers who could be laid off during periods of weak demand, are no longer sufficient.<\/p>\n
“Today’s challenges have grown so large that this flexibility is no longer enough,” Werding said.<\/p>\n
A shift from 35 to 40 hours without additional pay would increase working time by 14% without changing weekly wage costs. Werding added that the debate over working hours is “far beyond symbolic politics.”<\/p>\n
With more than 2.2 million members, IG Metall, Germany’s largest and most powerful trade union, rejects the claim that factories are bound by a rigid 35-hour working week constraint.<\/p>\n
Nadine Boguslawski, head of collective bargaining at IG Metall and a member of the Mercedes supervisory board, stated that agreements with employers already provide companies with significant flexibility to increase or reduce working hours.<\/p>\n
“A rigid 35-hour working week, as is sometimes portrayed, simply does not exist in the companies I know,” Boguslawski said.<\/p>\n
She added that IG Metall remains open to finding tailored solutions for struggling companies.<\/p>\n
At the heart of the debate lies a fundamental disagreement between unions and employers over whether longer working hours destroy jobs by distributing a fixed amount of work among fewer people, or protect jobs by making German factories more competitive.<\/p>\n
Boguslawski argued that one of the main reasons IG Metall fought hard for the 35-hour working week in the 1980s was to “bring more people into employment” by sharing available work among more people:<\/p>\n
“If you reverse this and increase weekly working hours to 40, you generally need fewer workers, regardless of whether those additional hours are paid or unpaid.”<\/p>\n
However, economists such as Werding argue that the volume of available work is not guaranteed and depends on the competitiveness of firms.<\/p>\n
They suggest that if lower labour costs per unit of output make German factories more competitive, companies can retain production and jobs that would otherwise move abroad or disappear.<\/p>\n
It remains unclear whether the push for longer working hours will make it onto the negotiating agenda between unions and employers this autumn.<\/p>\n
Gesamtmetall, the metal industry employers’ association, declined to comment on calls to abandon the 35-hour working week, citing “internal deliberations.”<\/p>\n
Berret worries that the political and public debate has not yet caught up with the scale of the crisis facing German industry.<\/p>\n
“Many people are living in a different reality regarding what lies ahead of us,” Berret said.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Some of Germany’s biggest industrial bosses are reigniting the debate over longer working hours. Nearly 40 years ago, German metalworkers secured a 35-hour working week by winning one of the most contentious disputes in the country’s post-war history. According to a report in the Financial Times (FT), prominent companies, including Mercedes-Benz and toolmaker Stihl, have […]<\/p>\n","protected":false},"author":1,"featured_media":16361,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[3],"tags":[21661,21662,3520,805,543,6784,4039,21668,8031,21660,8249,21665,21664,2380,8118,21667,21666,21663,6043,21669,5851,2709],"class_list":["post-16360","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-europe","tag-35-hour-working-week","tag-40-hour-working-week","tag-competitiveness","tag-european-union","tag-germany","tag-gesamtmetall","tag-ig-metall","tag-imk","tag-industrial-production","tag-labour-costs","tag-manufacturing-sector","tag-marcus-berret","tag-martin-brudermuller","tag-martin-werding","tag-mercedes-benz","tag-nadine-boguslawski","tag-roland-berger","tag-stihl","tag-trade-unions","tag-unit-labour-costs","tag-us-tariffs","tag-volkswagen"],"yoast_head":"\n
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