Germany’s Cabinet Greenlights National Plan to Reverse Collective Bargaining Decline
Published on 07/23/2026 at 09:21 | Redaktion boerse-global.de
Germany’s federal cabinet approved a National Action Plan on July 22 aimed at shoring up collective bargaining coverage, a move that comes as the share of workers in union-negotiated jobs has fallen to just 49 percent — down from 79 percent in 1996. The European Union has set a target of 80 percent.
The plan bundles several existing and upcoming measures. Among them: the Federal Procurement Fairness Act, in effect since May 1, 2026; a tax bonus for union membership dues introduced in January 2026; a digital access right for unions in workplaces; and supplementary tools like training subsidies and climate-protection contracts.
But the German Trade Union Federation (DGB) called the package insufficient. Chairwoman Yasmin Fahimi is pushing for stronger legal levers — including easier pathways to make collective agreements generally binding, better protections for works councils, and rules ensuring that collective contracts survive corporate restructurings. According to DGB calculations, if collective bargaining coverage were universal, employees would collectively take home an extra 58 billion euros per year.
Pilot Wage Deal in Bavarian Wholesale and Foreign Trade
On the ground, a practical outcome emerged from Bavaria. ver.di and employers reached a pilot agreement on July 21 for the wholesale and foreign trade sector. Wages will rise in two steps: 2.9 percent from August 1, followed by another 2.1 percent from May 1, 2027. The deal runs for 24 months and covers roughly 240,000 workers. Apprentice pay is set to increase at a disproportionately higher rate. The parties expect the agreement to set a benchmark for ongoing negotiations in other German states.
Vietnam Moves to Raise Regional Minimum Wages by 7.8 Percent
In a separate development, Vietnam’s Interior Ministry has proposed an average 7.8 percent increase in regional minimum wages, scheduled to take effect at the start of 2027. The plan differentiates across four geographic zones. In the economically strongest Region I, the monthly minimum would rise to 5.7 million VND. Regions II, III and IV would see levels of 5.08 million, 4.45 million and 4.04 million VND, respectively. The nominal monthly increase ranges from 310,000 to 390,000 VND.
Hourly rates would also climb — from 27,400 VND in Region I to 19,400 VND in Region IV. The ministry said the new floor would sit about 3.1 percent above the calculated minimum living standard, based on an assumed annual inflation rate of 4.5 percent for 2026 and 2027.
The National Wage Council had already agreed on the key parameters on July 16. Five provinces, including Ho Chi Minh City and Da Nang, have additionally requested a reclassification of their territories.
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