The Postal Minimum Wage and the German Monkey Wrench

How do you outsmart the competition in a privatized postal world?

Hijack your competitors' labor costs.

German Chancellor Angela Merkel's Christian Democrats and their Social Democrat coalition partners threw a monkey wrench into the free market of Germany's increasingly-privatized postal landscape when they recently steered a bill through the lower house of the German parliament that mandate minimum wages for all 200,000 postal workers of between 8 euros ($11.75) and 9.80 euros an hour, effective Jan. 1.

The government bill has been criticized by opposition lawmakers and mail carriers as a measure to protect Deutsche Post AG once it loses its exclusive license to deliver mail on Jan. 1. Deutsche Post has said it expects the loss of its letter-carrying monopoly to trim earnings at its mail division by as much as 20 percent by 2009. The government owns more than 30 percent of Deutsche Post through its KfW banking group.

The legislation is based on a contract brokered earlier this year by some mail carrier groups. Minimum wages currently only apply in Germany to the building industry and to some cleaners.

``You aren't protecting employees with this bill, you're protecting the monopoly of Deutsche Post,'' Free Democrat leader Guido Westerwelle said in a speech to the Bundestag. A sum of 9.80 euros would be ``the highest minimum wage in the world,'' he said.

According to Bloomberg.com, mail-service companies that say they'll need to fire staff if the measure becomes law. Berlin-based Axel Springer AG, Europe's biggest newspaper publisher, says it will stop funding its Pin Group mail services unit because the minimum wage makes it no longer viable. TNT NV, Europe's second-biggest express-delivery company, says it may leave Germany if the rules come into place that hurt competition, particularly over minimum wages and tax exemptions.

The decision by the Bundestag, Germany's lower house of parliament in Berlin, still has to be approved by the veto- wielding upper house to become law. The upper chamber, or Bundesrat, comprising lawmakers from Germany's 16 states, is scheduled to vote on the matter on Dec. 20.