The index of agreed wages and salaries measures - for large areas of trade and industry and for central, regional and local authorities - the average change of hourly wages and monthly salaries that are fixed by collective agreements. It is an important indicator of the general development of agreed remuneration and is used, among other things, to estimate staff expenditure and costs in long-term contractual relationships (price clauses). The index of agreed weekly working hours complements the above index of agreed wages and salaries. By combining the index of 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 production industries, distributive trade, credit and insurance industry (only salaried employees), transport and communications, hairdressing, and central, regional and local authorities. The hotel and restaurant industry is shown separately; it is planned to integrate that branch into the index of agreed wages and salaries by the end of 2005, after the results of the 2001 structure of earnings survey will have been evaluated.
How is the indicator calculated?
About 550 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 employees 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 employees 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 employees in a specific economic branch have in the total number of employees in all economic branches covered (weighting pattern). The number of employees 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, and, up to the GLS 1995, transport and communications, and hairdressing), the number of employees 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 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 employee structures of the base year applicable. Changes in the employee structure of local units by economic branches are taken into account when the index is recalculated for a new base year. The current base year is 1995. Rebasing the indices of agreed wages and salaries to a new base year is done at intervals of about five years, as is internationally customary. Changing over to the new base year 2000 was done in April 2003 as a simple rebasing procedure as from reference month January 2003, while reweighting of employees by economic branches based on the 2001 structure of earnings survey will be performed by the end of 2005.
When is the indicator released?
The Federal Statistical Office releases the index of agreed wages and salaries by way of press release around the 29th day of the third month following the reference month. 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 continued after the change-over to base year 2000 because adjusting agreed remunerations in the new Länder to West German levels, 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 employees 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 employees in the economic branches covered has changed considerably. Rebasing the index every five years presumably involves deviations of up to 0.3 index points.
