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Sep 08 2008

Germany’s push for longer working hours

Published by at 9:39 pm under Europe,Opinion

This article I wrote for a German government agency magazine called Invest in Germany Magazine and distributed in a number of English-speaking countries (including the USA). The article was published on my old blog on 20/5/2005.  

Within 3 years the majority of small and medium-sized businesses (SME’s) in Germany could be working 40 hours or more per week. 

That is the astounding conclusion of a survey conducted recently by the German Chamber of Industry and Trade (DIHK) amongst 20 000 businesses in the old and new provinces of Germany. 

The survey found a strong trend towards longer working hours in the private sector and towards greater flexibility in structuring the working day. In the next 3 years these trends will contribute towards lower labour costs making German products and services more competitive on world markets. 

According to the DIHK report one in every three businesses was already on a 40-hour work week. But one in every two could work 40 hours per week, if the trends revealed by the survey actually materialise. 

“The 40-hour work week is a reality in Germany. To think differently, is to ignore reality,” said dr. Martin Wansleben, head of the DIHK, in reaction to the report finding. 

The research, published on the DIHK website, found two-thirds of all businesses in the new provinces already worked 40 hours or more per week. In comparison only 30% of businesses in the old provinces worked longer than 35 hours per week. 

As was to be expected, more businesses in the old provinces said they planned to increase their working hours. 

“In the old provinces half of all those businesses still working less than 40 hours are planning to move to a 40-hour work week in the next 3 years,” said the DIHK. 

Not all will manage to increase their working hours. 

“A third of the businesses planning to move to a 40-hour work week expected to be unsuccessful in their attempts – due to the trade unions,” said the DIHK. 

But even if that happened, the 40-hour work week could still be the norm by 2008 – meaning the majority of Germany’s 3.3 million businesses could by then be working 40 hours or more. 

Just as significant, were the fact that many businesses hoped to increase their working hours without increasing the salaries of employees. 

This push towards lower labour cost is nothing new to corporate Germany. 

In February this year the UK magazine The Economist praised the efforts of corporate Germany to lower costs saying: “Between 1994 and 2004 German labour costs fell by 10% against the Euro-area average.” 

“Great strides have been made…(and)…German business is regaining its vigour”, wrote the magazine. 

If the DIHK survey is anything to go by, this drive to cut labour costs will be maintained for at least another few years. 

Of course, Germany’s big industrial companies, where about 30% of Germany’s workforce is employed, had a different story to tell. 

While 70% of small and mid-sized businesses in Germany reported working more than 40 hours per week, only 10% of big businesses said they were doing it. 

In the past Germany’s workers were often critisized for their “lack of flexibility”. The survey also had positive news on this front, namely that flexible working hours is already practised by two-thirds of all businesses and growing in popularity. 

So, yet another stereotype of corporate Germany is fast biting the dust. 

No wonder, The Economist wrote in February: “Germany’s image as the sick man of Europe, with high costs and flabby firms unable to compete in the global marketplace, is an outdated image.” 

And concluded (tongue in cheek, of course): “In some ways…America’s economy needs more restructuring than Germany’s.”

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