German cabinet paves way for minimum wage for postal workers

German Chancellor Angela Merkel’s Cabinet agreed on legislation that paves the way for basic rates of pay for postal workers, a move that extends the industries covered by statutory pay levels without introducing a national minimum wage.

The bill is a precondition for agreement between the postal employers’ association and the Ver.di labor union on a basic rate of pay for people who deliver, sort and collect letters. The deal excludes workers delivering packages, newspapers, magazine or books unless they also carry letters.

The regulation became necessary because Deutsche Post AG, Europe’s largest postal service, loses its letter-delivery monopoly at the end of this year, yet other European countries aren’t immediately following suit, Labor Minister Franz Muentefering told reporters in Berlin today.

“This isn’t a crazy, romantic idea,” Muentefering said of establishing minimum rates of pay. “It is indispensable in a society with a low-wage sector which can’t be organized by unions and employers. We have to establish a base.”

A statutory minimum wage may be good news for Deutsche Post, which has forecast that domestic competition will trim earnings at its mail division by as much as 20 percent by 2009. The minimum wage regulation would also apply to competitors such as Pin AG.

The government measures will also afford protection to postal workers employed by foreign companies allowed to operate in Germany from next year, because foreign firms might try to pay workers below the local wage level, Muentefering said.

Merkel’s coalition rejected labor union calls for a national minimum wage in June, instead agreeing to extend basic rates of pay to more industries. While Muentefering’s Social Democrats favor a minimum wage, Merkel’s Christian Democrats argue a national wage level would “destroy more jobs than it created,” Volker Kauder, the party’s parliamentary leader, said after the June agreement.

Minimum wages currently apply only to the building industry and to some cleaners. The government may extend minimum pay to between 10 and 12 industries in April next year as they apply to make minimum wages binding. Security and temporary employment agencies are likely to be among them, Muentefering said today.