Indices of agreed earnings and working hours
What do the indicators describe?
The indices of agreed earnings and working hours measure the average change in monthly earnings as well as in the weekly working hours that are fixed by collective agreements. They are indicators of the general development of agreed remuneration and play an important role in stable-value clauses in longer-term contractual relationships (price clauses). By combining the index of monthly earnings with the index of weekly working hours, the index of agreed hourly earnings is obtained. The indices of agreed earnings and working hours are part of the dissemination standard of the International Monetary Fund (IMF).
Since the reference month of January 2009, the indices of agreed earnings and working hours have covered all sectors of economic activity (with the exception of agriculture and households). The selection of economic activities to be covered in the private sector is based on earnings statistics. Up to and including the reference year 2008, the indices covered the industry, wholesale and retail trade, financial intermediation, transport, storage and communication, as well as hairdressing, the central, regional and local authorities, and hotels and restaurants (separately). Since the reference month of January 2009, additional service branches have been taken into account in order to implement the new Earnings Statistics Act which entered into force on 1 January 2007.How are the indicators calculated?
About 650 selected collective agreements in Germany are evaluated at the Federal Statistical Office by the end of the 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 earnings and working hours. To ensure a high level of information value, the collective agreements included cover at least 75% of the employees in each economic branch to be represented.
Every year, some 3,000 to 3,500 wage and salary data for the whole of Germany are included as well as 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. Not included are individual bonuses and premiums, one-off payments, flat rate payments and remuneration in excess of agreed earnings.
The remuneration, wage or salary changes in the various collective agreements are included in the indices of agreed earnings and working hours 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 (SES; currently SES 2006), which is conducted at intervals of four years among about 34,000 local units for some 3 million private sector employees. The central, regional and local authorities are not covered by the SES, but relevant information is derived from the annual statistics on public service personnel.
The indices of agreed earnings and working hours are computed as Laspeyres price indices with a fixed base year, i.e. the index numbers refer to the structures of employees in the applicable base year. The weights used for the current base year 2006 are those of the 2006 structures of earnings survey.When are the indicators released?
The results are published at quarterly intervals (January, April, July, October). Apart from that, provisional monthly indices are calculated for selected economic sectors. The release calendar and the press releases are available from the website of the Federal Statistical Office.
Even after the index rebasing to 2006, separate indices of agreed earnings and working hours are still being published for the former territory of the Federal Republic and the new Länder and Berlin-East, because the agreed remuneration in the new Länder, for instance, of employees of the central, regional and local authorities, has not yet been fully adapted to western levels.How accurate are the indicators?
The collective agreements used to calculate the indices of agreed earnings and working hours cover at least 75% of the employees in each 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 a noticeable effect only if the structure of employees in the economic branches covered has changed considerably.
>>> Statistics from A to Z (further definitions)
For further information please contact:
Herr Markus Biermanski
Phone: +49 611 75 2407
