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Will Germany's wave of strikes stifle economic growth?

Nicolas Martin
March 14, 2024

Labor unrest is sweeping across Europe's biggest economy, permeating sectors such as aviation, transportation and health care. How big a blow will this deal to Germany's already meager growth?

A person walks in an empty Cologne main train station during a nationwide strike called by German's train drivers union GDL
Germany's national railway operator has been hit especially hard by industrial labor actionImage: Jana Rodenbusch/REUTERS

In the heart of Germany's industrial landscape, labor disputes and growth concerns are casting a shadow over the nation's economic outlook. At the forefront of the current tumultuous landscape is Jens Höngen, a seasoned 30-year-old locomotive driver with a decade-long tenure at Deutsche Bahn, the country's leading railway operator.

Höngen's journey within state-owned Deutsche Bahn has been marked by both dedication and discontent. Despite his years of service, he has found himself at odds with his employer, and has participated in multiple strikes in recent months.

"Striking isn't fun," Höngen told DW, echoing the sentiments of many of his fellow workers. "There is less and less staff to operate more and more trains. The younger generation is not interested [in the job]. The working conditions are simply not attractive."

The situation is bound to worsen as many of his colleagues will soon retire.

Representing his colleagues in the Cologne branch of the German Train Drivers' Union (GDL), Höngen also attributes the current discontent to Deutsche Bahn's relentless push for productivity at the expense of its workforce.

A picture of train driver Jens Höngen
Train driver Jens Höngen loves his job, but hates his working conditions.Image: Jens Höngen

Burden of shift work

Central to the issue is the grueling nature of shift work, a cornerstone of railway employment. Railway drivers like Höngen operate under demanding schedules, often logging far more than the official 38-hour workweek — at times up to 55 hours a week.

"Sometimes we work six days in a row, sometimes five days with one day off, and then another five days," Höngen said, highlighting the toll it takes on his physical and mental well-being. The strain is evident as more and more colleagues "either succumb to burnout or opt for alternative career paths."

The consequences extend beyond the workplace, impacting Höngen's personal life and aspirations. Shift work, he said, is dictating his social life, relationship, and even considerations about starting a family: "When you bring a child into the world, it also means responsibility, and the job limits the time available."

Like the GDL union, Högen is calling for a shorter 35-hour workweek, higher compensation, and 48-hours rest periods between long shifts.

Public transport workers on strike with placards and flags
Public transport workers are also demanding better pay and improved working conditionsImage: Frank Hammerschmidt/dpa/picture-alliance

Labor disputes and a slowing German economy

Höngen and his 40,000 colleagues organized within the train drivers's union are not isolated in their struggles in Germany these days. Across the country, labor unrest is on the rise, with strikes permeating various sectors, including aviation, regional transportation and health care.

The catalyst, as Höngen sees it, is the mounting economic pressure "exacerbated by inflation."

"You need to pinch and scrape, and all expenses have to be calculated more precisely. That wasn't the case in the past," he observed, underscoring the widespread dissatisfaction among workers in Germany.

Yet amidst the backdrop of strikes and economic uncertainty, there are apprehensions about the broader implications for Germany's economy.

Economist Moritz Schularik has recently warned of the nation sliding deeper into crisis, becoming what he called a "welfare museum." And economist Clemens Fuest fears the current wave of prolonged labor disputes could "derail Germany's path to recovery and erode its global competitiveness," as he told German public broadcaster ARD.

A train transporting new cars
The German economy isn't running smoothly anymoreImage: Jochen Tack/picture alliance

More strikes, less productivity?

The issue of labor productivity further complicates the narrative. While strikes undoubtedly incur economic costs, the impact on productivity is subject to debate.

According to data provided by the European Union Statistics Office, or Eurostat, labor productivity in Europe witnessed a sharp decline in the final quarter of last year, fueling concerns of a widening productivity gap with the United States, where productivity rose.

Overall, one day of strike costs the German economy about €100 million ($109 million), according to calculations by the German Institute of Economic Research (IW) in Cologne.

But Steffen Müller from the Leibniz University for Economic Research in Halle, Germany, cautions against oversimplification, noting that hourly labor productivity metrics paint a nuanced picture.

"Labor productivity is ultimately the value added per unit. Since Americans generally work much more than Germans, it's clear that the figures per employee there are higher," he told DW.

However, it's important how much output per hour is produced, he added, and there hasn't been much of a difference between Germans and Americans for more than 30 years.

German strikes hurting economy and travelers alike

German rust and dust

But Müller also noted that a productivity gap between Germany and the US has, indeed, opened up since the COVID-19 pandemic and rising geopolitical tensions in the wake of the Ukraine war.

"The German economy works like a well-oiled machine as long as things don't change quickly. But currently, one crisis follows another, and we don't handle that well," he said, noting that strikes would play a less important role for the economy than structural problems, such as high energy prices, labor shortages and overburdening bureaucracy.

"In the end, GDP may rise a bit more weakly than without the strikes. However, it cannot be seriously calculated how much this affects the economy."

But for Höngen and his fellow train drivers, the question of productivity has a completely different dimension. 

"If working conditions remain the same, no one wants to work for the railways anymore. So when the number of retirees goes up over the next few years, the railway system is sure to collapse," he said, adding that then productivity issues won't matter anymore.

This article was originally written in German.