Index of collectively agreed wages and working hours
What does the indicator describe?
The index of collectively agreed wages and working hours measures the average change of hourly wages and monthly salaries as well as the weekly working hours that are fixed by collective agreements. It is an important indicator of the general development of agreed remuneration and plays an important role in stable-value clauses in longer-term contractual relationships (price clauses). By combining the index of agreed hourly wages with the index of weekly working hours, the index of agreed weekly wages is obtained. The indices of agreed wages and salaries are part of the indicators of the dissemination standard of the International Monetary Fund (IMF). The economic sectors covered are industry, distributive trade, credit and insurance industry (only salaried employees), transport and communications, hairdressing, and central, regional and local authorities. Hotels and restaurants are covered separately. Selection in private sectors of the economy is based on the statistics of earnings. From reference year 2009, further service industries will be included in accordance with the new Law on earnings statistics which came into force on 1 January 2007.
How is the indicator calculated?
About 650 selected collective agreements in Germany are evaluated at the Federal Statistical Office by the end of reference months January, April, July and October for the relevant preceding quarter (secondary statistics). Only the collective agreements covering the largest numbers of persons employed are included in calculating the indices of agreed wages and salaries. To ensure a high level of information value, the collective agreements included cover at least 75% of the persons employed in the economic branch to be represented. The data that are included every year are about 3,000 to 5,000 wage and salary data for the whole of Germany and about 3,700 to 4,000 data on weekly working hours, on the dates when collective agreements are concluded or terminated, and on the level of employment benefits to encourage capital formation. What is not included is individual bonuses and premiums, one-off payments, flat rate payments and remuneration in excess of agreed wages or salaries.
The wage or salary changes in the various collective agreements are included in the index of agreed wages and salaries according to the share that the persons employed in a specific economic branch have in the total number of persons employed in all economic branches covered (weighting pattern). The number of persons employed by economic branches is obtained from the structure of earnings survey (GLS; currently GLS 1995), which is conducted at intervals of four to six years among about 27,000 local units for some 900,000 employees. For areas not covered by the GLS (central, regional and local authorities, transport and communications, and hairdressing), the number of persons employed is derived from the annual statistics on public service personnel, the statistics of employees subject to social insurance contributions, and surveys conducted by the Federal Statistical Office (among the biggest enterprises; for instance Lufthansa in the transport sector, Deutsche Post AG in communications). The previous GLS was replaced by a new structure of earnings survey (VSE) on 1 January. The current VSE includes additional service industries so that, from reference month January 2009, additional sources will be required only for central, regional and local authorities.
The index of agreed wages and salaries is computed as a Laspeyres price index with fixed base year, i.e. the index numbers refer to the structures of persons employed in the base year applicable. The current base year is 1995. Changing over to the new base year 2000 was done as a simple rebasing procedure as from reference month January 2003. From 2009, the weighting structure of the 2006 structure of earnings survey will be used as a basis.
When is the indicator released?
The results are released at quarterly intervals (January, April, July and October). The release calendar and the press releases are available on the website of the Federal Statistical Office. Releasing separate indices of agreed wages and salaries for the former territory of the Federal Republic and for the new Länder and Berlin-East has been maintained after the changeover to the new base year 2000 because adjusting agreed remunerations in the new Länder to the West German level, e.g. for central, regional and local authorities, has not been completed yet.
How accurate is the indicator?
The collective agreements used to calculate the index of agreed wages and salaries cover at least 75% of the persons employed in the economic branch to be represented. For the remaining collective agreements that are not included, it is assumed that their development is similar to that of the agreements included. Changing over to a new weighting pattern will have some effect only if the structure of persons employed in the economic branches covered has changed considerably.
