The government of North Rhine-Westphalia, led by Minister-President Hendrik Wüst of the CDU, is facing fierce backlash from business leaders as it prepares to introduce a proposed wage security law this Tuesday. The legislation, intended to bolster adherence to collective bargaining agreements in public procurement processes, is being characterized by critics as a misguided and burdensome measure at a time of significant economic fragility.
Johannes Pöttering, Managing Director of the Association of Employers of North Rhine-Westphalia, vehemently denounced the law in an interview with the “Rhinischen Post” describing it as “nothing more than bureaucratic symbolic politics at a completely inappropriate time”. He argued that imposing state-mandated wage structures undermines the very principle of collective bargaining, creating unnecessary administrative overhead and hindering the public bidding process. Pöttering warned that by dictating wages through legal decree, the state risks not strengthening, but actively weakening, wage autonomy.
The initiative, stemming from a coalition agreement between the CDU and the Green Party, aims to restrict public contracts to companies that pay wages according to collective agreements – a concept embodied in a “wage loyalty law”. While unions had recently voiced impatience at the apparent lack of progress on this front, Minister-President Wüst’s surprise announcement at the recent regional conference of the German Trade Union Confederation (DGB) in Essen, while intended to appease labor groups, has triggered considerable concern within the business community.
While acknowledging that the government appears to be opting for a less stringent approach compared to similar proposals currently under consideration in Berlin, Pöttering insisted the law will still impose additional burdens on both businesses and public administration. He emphasized the particularly damaging timing, given the current precarious economic climate.
The criticism extends beyond the immediate financial implications. Business leaders are signaling that the government’s commitment to reducing bureaucracy at the state level must be demonstrably fulfilled if this new legislation proceeds. Pöttering explicitly called on the state government to translate its announcements about streamlining processes and providing relief to businesses into tangible actions, asserting that sufficient proposals for such reforms already exist. The move is being interpreted by some as a calculated risk by the government, intended to secure union support while simultaneously exposing them to potential economic repercussions and increased political scrutiny.