DGB: State loses billions through wage evasion
According to a DGB analysis, the state is losing billions of euros in revenue due to employers' wage evasion. In total, the social security system in Germany would lose around 43 billion euros in contributions each year. The federal, state and local governments would receive around 27 billion euros less in taxes.
The shortfall in revenue from Baden-Württemberg would amount to 6.1 billion euros in social security contributions and four billion euros in income tax. This is according to calculations by the German Trade Union Confederation (DGB) based on data from the Federal Statistical Office, which were presented on Monday.
So-called collective bargaining evasion is an attempt by an employer to undermine a collective agreement and thus pay lower wages and salaries than collectively agreed. According to the DGB, this also means fewer payments into the social security system - i.e. lower income from unemployment, pension and health insurance. Tax revenue from income tax would also be lower.
Purchasing power would also be significantly reduced. If you look at the South West across all sectors, the bottom line is that employees who do not have a collective agreement would have 3009 euros less net per year than employees covered by collective agreements.
The DGB criticized the fact that only around half of all employees in the southwest benefit from collective agreements and their protection. "Collective bargaining evasion and a lack of collective bargaining coverage undermine fair competition between companies," said DGB state head Kai Burmeister according to the press release. Social cohesion is being weakened.
Burmeister called on the state government to implement the reform of the State Collective Agreement and Minimum Wage Act provided for in the coalition agreement. Regional collective agreements should be made the benchmark for public procurement. The DGB also demanded that public contracts and subsidies should generally only be awarded to companies that apply collective agreements.
Trade unions could advocate for stricter enforcement of collective agreements to prevent wage evasion, potentially reducing losses in social security contributions due to tariffs. In the context of international trade, governments might consider reducing tariffs between countries to stimulate trade, which could potentially benefit both parties financially.
Source: www.dpa.com
