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Collective bargain agreement in the public sector - major reform in the public sector pay system?

Thomas Böhle, Ralf Stegner, Walter A. Oechsler, Monika Böhm
ifo Institut für Wirtschaftsforschung, München, 2005

in: ifo Schnelldienst, 2005, 58, Nr. 07, 03-15

Is the collectively bargained agreement for federal and municipal public service workers and employees the beginning of a comprehensive restructuring of public service pay system or a preservation of already existing structures? For Dr. Thomas Böhle, Federation of Municipal Employers' Associations, "the previous pay system is being replaced by a modern, performance-oriented and transparent pay system which is more in accord with a citizen-oriented modern administration". Also Dr. Ralf Stegner, Minister of Finance of Schleswig-Holstein, sees the positive aspects: "The Potsdamer collective agreement of 9 February 2005 is the first step of a major reform of the public pay system with its introduction of new remuneration structures, in which the unions have also demonstrated their willingness to reform. In the details, however, decisions were made that will need to be scrutinised by the Länder." Prof. Walter A. Oechsler, University of Mannheim, is far more sceptical: "An analysis clearly shows that the agreement does not represent the thorough modernisation of the pay system in public service." In the opinion of Prof. Monika Böhm, University of Marburg, the collective agreement represents an important contribution to the necessary comprehensive restructuring of public service although to a large extent it still adheres to the previous structures.

JEL Classification: J210,J450

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ifo Institut für Wirtschaftsforschung, München, 2005