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Germany Approves A 28-Hour Work Week For Millions Of Workers

Germany Approves A 28-Hour Work Week For Millions Of Workers

By Ryan Velez

Have you been griping about all the time you spend at work? CNN reports that while workers across the U.S. are fighting for a $15 minimum wage, Germany is moving ahead by leaps and bounds, approving 28-hour work weeks for millions of workers.

Labor union IG Metall secured an unprecedented deal this week to give a large portion of its 2.3 million members more flexible working hours and a big pay rise. This means that workers across several of the top engineering firms, such as Mercedes-Benz owner Daimler, can opt to work 28 hours a week for up to two years, before returning to the standard 35-hour week.

“This sets the standard for everyone else,” said Megan Greene, chief economist at Manulife Asset Management. This is the product of negotiations for over 700 companies in the southwest part of the country, and is expected to have serious ripples across German industry. According to IG Metall, the flexibility is designed to help those who want to care for children or relatives have more flexibility. There is also the option to work 40 hours to make more.

Non-unionized workers aren’t a part of this yet, but could soon. Success here would likely be followed by allowing terms to be applied to wider workforces.

“You can expect similar deals to come in other sectors and regions soon,” said Famke Krumbmüller, a partner at OpenCitiz, a political risk consultancy.

Different companies have different opinions on the change. Bosch, which employs 138,000 people in Germany, said it would offer the same pay rises and perks to the majority of its German workers. It said the flexible hours wouldn’t be disruptive.

“Bosch already has about 100 different working hour models to ensure an optimum work-life balance,” said Simon Schmitt, a company spokesperson. Südwestmetall — the employers’ association that agreed on the deal — said it was a compromise with some “painful elements.” This could include potential labor shortages due to the shorter working week.

The real winner here could be the German economy, as workers covered by this deal end up spending more. IG Metall said its members would get a 4.3% raise, starting in April. That equates to a rise of about 3.5% on average in 2018, according to Florian Hense, an economist at Berenberg bank.

“This is good for workers,” said Hense. “They [will] see their pay rise by far more than inflation. This raises their disposable income and spending power.”

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