Companies' Calls for Shorter Workweek Stir Controversy

With its generous benefits and holidays, Germany has long been considered a worker’s paradise. Earlier this year, Economics Minister Wolfgang Clement raised the ire of the country’s trade unions and churches by suggesting Germans need to work more.

But the latest chapter of what has become an ongoing discussion has been sparked by Deutsche Telekom’s and Opel’s plans to actually scale back employees’ hours and wages. Industry groups and economists have criticized the companies’ decision, arguing just the opposite is needed to help spur long-term growth in Germany.

Ludwig-Georg Braun, president of the German Chambers of Industry and Commerce (DIHK), slammed cutting the workweek as a “shortsighted defensive strategy” in an interview with Web site of Germany's ARD public television.

“Longer working hours would on the other hand noticeably improve the competitive position of the companies in global markets,” Braun said. “Crisis strategies and cutting working hours won’t make any jobs or revitalize the domestic economy.”

Although some politicians and union bosses have applauded Deutsche Telekom and Opel for seeking solutions that might avoid massive job loses, some economists fear the longer-term effects for Germany’s companies. Due to poor economic conditions, Opel is discussing moving to a 30-hour workweek and Deutsche Telekom plans to cut hours for 100,000 employees by 10 percent.

Less competitve globally

Hagen Lesch, a labor market expert for the Cologne-based Institute for the German Economy (IW), told public television broadcaster ZDF that only by working longer for the same wages could German firms remain competitive. According to the institute, working one hour more per week with no increase in wages would cut labor costs by 2.7 percent, possibly creating 100,000 new jobs.

Noting that the Swiss work on average 300 hours and Americans 400 hours more per year than do Germans, Norbert Walther, chief economist for Deutsch Bank, told NDR public radio that Germans also handicapped themselves by starting work later than other countries. “Whoever wants to get rich and at the same time work less, doesn’t quite get it,” he said.

However, Thea Dückert, the deputy leader of the Green Party, called the decision to lighten employees’ workload as the lesser of two evils. “This model definitely involves more solidarity than the sacking of tens of thousands of workers,” she told the French news agency AFP. At the same time she admitted increasing hours would help companies save, but said lowering non-wage costs such as social security payments would be a better way to create more jobs.

The corporate model for scaling back hours in order to avoid slashing jobs is that of Volkswagen. Back in 1993 the crisis-hit carmaker moved to a four-day workweek, saving an estimated 30,000 jobs. The increased flexibility enables the company to better respond to changes in demand. Currently, however, VW is hoping to increase it’s workweek from 28.8 hours to 35 by using a “demographic” labor plan stepped according to age.