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3. Wild West Conditions in Germany?! Low-Skill Jobs in Food Processing
- Russell Sage Foundation
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CHAPTER 3 Wild West Conditions in Germany?! Low-Skill Jobs in Food Processing Lars Czommer Wild West Conditions in Germany” ran the headline of a January 2005 article in the German weekly STERN on the German meat processing industry. The quotation came from Danish trade union boss Peter Bostrup, who had said, referring to Tulip and Danish Crown, the two Danish meat processing companies that had transferred many jobs to Germany in order to cut costs: “It’s like the Wild West in Germany and they’re paying starvation wages there.” On the same subject, the largest Danish daily newspaper, JyllandsPosten , wrote: “German abattoir workers cost a third as much as Danish workers.” The background to these stories is that, since 2004, Eastern European contract workers have been recruited in increasing numbers on “dumping” wages to work in the German meat processing industry. From a purely legal point of view, the same thing could also happen in Denmark, but, according to a statement by a spokeswoman for Danish Crown, such a recruitment strategy is out of the question: “We have collective agreements, and we’re sticking to them” (Borchert 2005). In Germany, on the other hand, press reports suggest that some Eastern European contract workers in abattoirs are now being paid just j1.90 (US$2.78) per hour and that these wage levels have led to the loss of many jobs (Lorscheid 2005; Meichsner 2007). Although such practices have not yet spread to the food industry as a whole, the situation in many abattoirs highlights the fact that it is much more difficult to implement minimum pay standards in Germany than in many other countries. Against this background, voices are increasingly being raised (even in the center-right Christian democratic parties, which tend to have a critical stance on minimum wages) in favor of generally binding minimum standards for the meat processing industry that could be applied even to foreign contractors and their workers by incorporating the industry into the Posted 147 Workers Act (Ad-Hoc-News 2007). However, the meat processing industry fails to meet one important precondition for such legislation: there is no national collective agreement that could be declared generally binding; there is not even an employers’ association with which the food and restaurant workers’ union, NGG (Gewerkschaft Nahrung-Genuss-Gaststätten), could negotiate such a collective agreement. The meat processing industry is a glaring illustration of the fact that, in low-wage sectors in particular, Germany’s collective agreement system has become full of holes. Indeed, in many industries that system has never been able to ensure universal compliance with minimum standards. In other parts of the German food industry , such as the confectionary sector, the situation is somewhat more favorable. It is true that low wages are not exactly a rarity there either, but at least there are still industrywide collective agreements that help to prevent abuses such as those in the meat processing industry, and particularly in abattoirs. However, low-skill jobs in both these subsectors of the food industry are exposed to very considerable competitive and cost pressures, which of course have consequences for employees’ pay and working conditions. This chapter begins with a brief survey of the industry and the case studies. I go on to focus on the effects of the strong competitive pressures to which producers in the meat processing and confectionary industries are exposed. The next section builds on this analysis and looks at the institutional environment and pay in the two industries and how they have developed over time. That is followed by a section in which the companies investigated are assigned to various strategy types and the internal and external strategies they adopt to meet their competitive challenges are revealed. The focus here is on the working and employment conditions of production workers in the lower wage brackets. Finally, the results of the investigation are summarized with a view to assessing the future significance of low-skill occupations in the industries under investigation. THE INDUSTRY AND THE CASE STUDIES The German food industry has a sales volume of over j130 billion (US$190 billion) and an export ratio of 14.8 percent (NGG 2006a), making it one of the most important sectors in Germany in terms of economic and employment policy. Within the manufacturing industries , the food-processing industry comes in fourth, behind the 148 Low-Wage Work in Germany [54.167.52.238] Project MUSE (2024-03-28 19:52 GMT) chemistry, machine tool, and...