EUR 4,784 gross per month. That is the average income of a full-time employee according to the latest figures from the Federal Statistical Office. Anyone who is a union member generally pays 1% of this amount, an average of EUR 47.84 every month, even though many of the tasks are no longer up to date today – especially when someone is already taking their finances into their own hands.
Such an amount may barely stand out on a payslip. Calculated over 40 years of employment, however, it becomes a substantial sum that could be missing from an individual portfolio and might be better placed there. Anyone investing EUR 47.84 per month and achieving an average return of 5% per year ends up with approximately EUR 73,000 in the model calculation. This makes it clearer what a small ongoing deduction can become when the money is added to personal wealth rather than paid to an organisation.
The usual counterargument from union members is that unions negotiate higher wages. That is true. It does not answer the question of whether the contribution brings each member greater personal benefit over four decades. A collective bargaining agreement does not automatically create wealth and certainly does not ensure stable retirement provision. Legal protection likewise does not create a balance – especially if it is not needed anyway because employment law is designed so that decisions are often made in favour of the employee. Both can be valuable, but both are different from ownership.
EUR 47.84 is little – until 40 years have passed
The Federal Statistical Office reports an average gross monthly income of EUR 4,784 for full-time employees in April 2025, excluding special payments. This average naturally does not correspond to a typical salary. High incomes pull the figure upward. The assumption is nevertheless sufficient for a comprehensible order of magnitude.
Ver.di charges employees 1% of their regular monthly gross income. IG Metall also charges a contribution of 1%, although additional types of income may be included there. There is no uniform union contribution for the whole of Germany.
If this amount is paid into a broadly diversified equity investment at the end of each month for 40 years, the following development results at an annual return of 5%:
| Years of employment | Contributions paid in | Portfolio value at 5% return | Increase in value |
|---|---|---|---|
| 10 | EUR 5,741 | EUR 7,429 | EUR 1,688 |
| 20 | EUR 11,482 | EUR 19,664 | EUR 8,182 |
| 30 | EUR 17,222 | EUR 39,815 | EUR 22,593 |
| 40 | EUR 22,963 | EUR 73,005 | EUR 50,042 |
The model calculation is even cautious, although it is heavily simplified: it keeps the contribution at EUR 47.84 for 40 years. If the salary rises, a percentage-based contribution normally rises as well. For a clean basic calculation, however, it is better not to increase the amount at the same time as assumed wage growth. Otherwise, income growth, inflation and capital return are thrown into one pot. The EUR 73,005 after 40 years is a nominal final value before taxes and costs. At 2% inflation, it would correspond to only around EUR 33,000 in today’s purchasing power. All of this shows how long 40 years can be.
Contributions rise with gross pay, but the asset value remains zero
A union contribution is an ongoing expense. After 10, 20 or 40 years, it does not create a personal balance in the account. The money was used for collective bargaining, advice, legal protection, strike support, reserves and the union itself. Anyone who does not need these services cannot reclaim the contributions. This is similar to risk insurance. Household contents insurance does not build wealth either, but is intended to help in the event of a claim. For someone who consciously wants this protection, the contribution can make sense.
With a portfolio, the situation is much clearer: the deposits remain assigned to the investor. The value may fall, it may fluctuate and it may remain below every expected return. But any possible gain always belongs to the person who bears the risk.
A salary is earned in the labour market
A collective bargaining agreement is not the only source of a higher income. In many professions, qualifications, experience, demand and the willingness to change employers matter. Anyone who is permanently paid below market value can seek a new direction. A single change of employer can under certain circumstances bring more than several small collectively negotiated increases.
This naturally does not work equally well everywhere. A care worker cannot travel an unlimited number of kilometres to the next workplace. Regional ties, family, missing qualifications and a weak labour market set limits. This does not mean, however, that a union replaces personal negotiation. It merely offers a collective solution. The employee pays for it, even when the negotiated conditions are no better than what could have been achieved individually.
Personal bargaining power often arises where an employer has to retain good people. It is created by knowledge, experience, mobility and alternatives. A union cannot create these factors for every member; it can only pool them.
Laws also apply without a membership card
Minimum wage, working hours, holidays, protection against dismissal and occupational safety in Germany are primarily based on statutory rules. They also apply to employees who do not belong to a union. A membership card is not a prerequisite for an employer to observe breaks or pay the minimum wage.
Unions can negotiate additional conditions in collective agreements. Basic employment protection, however, comes from the law and is enforced by authorities and courts. Anyone changing jobs therefore does not lose any fundamental rights. Employment-law conflicts nevertheless occur. A dismissal may be unjustified, an employer may withhold wages and a dispute in court can be expensive. Union legal protection can help in such situations.
Collective bargaining benefits do not land in the account
A good collective bargaining agreement can exceed the membership contribution. Anyone who earns more permanently as a result of negotiations receives a concrete financial benefit. The union may then have been worthwhile. However, this benefit cannot be personally attributed to every member. Collective agreements often apply to all employees of an employer bound by the agreement, even if not everyone is a member. The organisation negotiates, and the workforce benefits. From the union’s perspective, this is a free-rider problem. From the individual employee’s perspective, it remains a question of cost.
Anyone who does not need legal protection, does not strike and receives the same collectively negotiated wage without a union pays for years for a service that is barely visible in everyday life. At most, this makes membership a conscious decision based on solidarity.
Membership contributions finance an organisation
Unions employ full-time staff, maintain offices, run campaigns, manage reserves and pay their leadership. Members’ contributions are the financial foundation for this. There is nothing unusual about that at first, because every larger organisation incurs costs, and individual union officials or corporate executives are occasionally criticised for a luxurious lifestyle. The money often remains within the organisational apparatus until it is spent on its tasks.
Anyone who invests EUR 47.84 every month instead is also financing a structure – but one that belongs to them and that will not later go on strike, negotiate collective agreements or conduct a legal dispute.
Personal responsibility begins with a simple calculation
For building personal wealth, nobody needs a union. Anyone who can assert their professional value in the labour market and does not need membership for basic statutory protection should regard the contribution as an expense. This applies particularly when the union’s services are not used for decades.
Union membership can be politically and collectively motivated. In that case, the contribution is consciously paid for collective bargaining power. Anyone who prioritises personal wealth building, by contrast, receives a tangible equivalent through the monthly deposit into a portfolio. Investing these EUR 47.84 regularly for 40 years can produce more than EUR 73,000 under the assumptions stated and create a genuine benefit.
