German trade unions. There’s life in the old dinosaurs

The lumbering giants of German labour are a bit lighter on their feet

REVOLUTIONS can't happen in Germany, Stalin said, because you would have to step on the lawn. True to the country's character, the strikes that spread across most of Germany this week were a civilised affair. Verdi, the services trade union, told parents to make alternative child-care arrangements. Local authorities gave out bags to help people stash their trash on balconies or in garages. And theatres put on plays that needed no backstage work.

While the largest public-sector strike in 14 years is unlikely to lead to chaos a la francaise, it is not the only sign that Germany's trade unions are staging a comeback. Industrial action in Nuremberg--after a decision by Electrolux, a Swedish home-appliances maker, to close a factory--has become a symbol of the battle to stop the flight of jobs. It has also boosted the standing of IG Metall, the metal workers' union, which may soon call another nationwide strike over wages. So could it be turnaround time for Germany's trade unions after many years of decline?

Conditions are certainly more favourable than they have been for a long time. Most economists expect growth to pick up this year: some put it as high as 2%. Many large firms are expected to show good profits, leaving room for more generous salary increases than in recent years, during which real wages have slipped and unions have given much ground.

Perhaps paradoxically, Germany's new political firmament also makes life easier for the country's unions. Before last year's elections, the Social Democrats (SPD) were the unions' only credible partner, so the previous chancellor, Gerhard Schroder, could afford to ignore union leaders when they opposed his "Agenda 2010" reforms. Now, with the Left Party in parliament, the SPD has lost this monopoly; it is thus unlikely to let the grand coalition government plough on with labour-market reform. Meanwhile, Michael Glos, the new economics minister, has called for wage increases--in tune with many Germans, who are beginning to think the time of belt-tightening is over.

IG Metall, in particular, seems headed for a partial victory. Demanding a 5% hike, it may get around 3%. And even though public-sector strikes tend to be unpopular, Verdi could get some of what it wants too. It is fighting efforts by some public-sector employers to extend the working week without extra pay to 40 hours or more from around 38.5 hours, as well as plans to trim holiday and Christmas bonuses.

Both unions badly need a success--not least to win time to solve their structural problems. At their core, says Anke Hassel, a professor at the Berlin-based Hertie School of Governance, Germany's unions are still monopolistic organisations geared to defending male bread winners, from skilled metalworkers to garbage men. This is at odds with most economic trends, such as the growth of the service sector as well as female and part-time employment.

Because they do not feel represented by traditional unions, new kinds of workers have never joined them, while others have left in droves. The Deutsche Gewerkschaftsbund, the unions' umbrella body, has seen membership fall to the levels of the early 1970s (see chart): of the 6.8m current members, nearly one-third are retired or jobless. If this trend continues, the last unionist will hand in his card by 2020. In contrast, specialised professional organisations such as Cockpit (pilots) and Marburger Bund (doctors) are growing.

German unions have tried to turn the tide. Some have merged: hence the landscape's domination by a duopoly of IG Metall and Verdi. This development has union-watchers--like Horst-Udo Niedenhoff of the Institut der deutschen Wirtschaft, a think-tank--worried that the two behemoths will compete as leaders of industrial action. Because of this rivalry, he says, the current negotiations may drag on.

But in other ways, the giants are competing to be flexible, not just militant. IG Metall has agreed to company-level exceptions from industry-wide wage deals, and Verdi has accepted pay for performance for civil servants. Both big unions now stress non-monetary demands, like training.

As a result, the haemorrhage of members has slowed and young people are joining again. And the current round of strikes could reinforce these trends. But overall, unions have yet to adapt to an increasingly diverse workforce. If they fail to attract all kinds of employees, they could face the dilemma of many big industrial conglomerates: break up or die.

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