Advances in Regulatory Economics series
Edited by Michael A. Crew, Paul R. Kleindofer and James I. Campbell Jr
Chapter 16: Competition, Wages and Politics in the Delivery Sector: The Case of Postal Minimum Wages in Germany
Alex Kalevi Dieke† and Ralf Wojtek‡ 1. INTRODUCTION Since 1998 – the year gradual liberalization was introduced in Germany – several hundred operators have entered the German market for letter delivery to compete with the incumbent Deutsche Post AG (DPAG). Virtually all of these operators provide end-to-end delivery and many of them operate at a local or regional level. In total, they deliver about 10 percent of all letters posted in Germany today (2007), up from less than 4 percent in 2003. With the recent growth of competitive mail delivery, a controversial political debate about working conditions at the entrants has emerged in Germany. Since winter 2006/07, labor unions, socialist and social democrat parties, and incumbent Deutsche Post have strongly argued in favor of sector-speciﬁc minimum wages, and such minimum wages were introduced in December 2007. The possibility of sector-speciﬁc minimum wages arises in Germany because there is no general minimum wage law, and wages are traditionally agreed between trade unions and employers’ associations. Concerns about working conditions during postal reform are not particular to Germany. Indeed, similar political concerns can be seen in a number of other European countries, and aspects of employment policy have been introduced into the Third Postal Directive that was adopted in early 2008.1 In this directive, the European legislator stipulates that on member state level ‘the granting of authorizations may, where appropriate, be made subject to or impose an obligation to respect working conditions laid down by national legislation’ (Art. 9, 2nd paragraph, 5th...
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