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Sector Surcharges for Temporary Agency Workers in Germany: A Way Out of the Low-Wage Sector?

Author

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  • Spermann, Alexander

    (University of Freiburg)

Abstract

Sector-specific surcharge collective labor agreements between the bargaining partners in the staffing industry allow for a reduction of wage gaps between agency workers and permanent staff in case of long-term job assignments to user companies. Surcharges up to 50% after a surcharge-free period between four and six weeks close the wage gap in nine industries for the temporary work agencies. The paper summarizes the development that lead to these collective labor agreements and analyzes repercussions on potential upward mobility of previously unemployed who start their career as agency workers in the low-wage sector. Furthermore, it highlights the interaction with the basic income scheme, documents new evidence on sustainable employment and draws conclusions for the precarious work discussion. It turns out that these new surcharges allow agency workers to leave the low-wage sector in case of longer job assignment in the core user company industries such as the metal and electrical industry.

Suggested Citation

  • Spermann, Alexander, 2013. "Sector Surcharges for Temporary Agency Workers in Germany: A Way Out of the Low-Wage Sector?," IZA Policy Papers 67, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izapps:pp67
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    Cited by:

    1. Spermann, Alexander, 2013. "How Does Temporary Agency Work Impact German Agency Workers?," IZA Policy Papers 70, Institute of Labor Economics (IZA).
    2. Schulten, Thorsten & Schulze-Buschoff, Karin, 2015. "Sector-level strategies against precarious employment in Germany: Evidence from construction, commercial cleaning, hospitals and temporary agency work," WSI Working Papers 197, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.

    More about this item

    Keywords

    precarious work; low-wage sector; collective labor agreement; staffing industry; temporary agency work;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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