# Westrick formula

With the **Westrick formula** , collective agreements with different terms can be compared.

## history

Ludger Westrick , former State Secretary in the Federal Ministry of Economics , developed (in 1963 on the occasion of a metal wage round ) a (simplifying) formula for collective agreements with a term of more than 12 months. If the term is longer than one year, the question of the medium-term real burden for the company regularly arises.

## formula

The formula assumes that tariffs are usually concluded for one year, but if they are longer, this results in long-term savings. The long-term real exposure is then calculated as well

Sometimes you will also find a simplified, but somewhat imprecise formula:

## Sample calculation

Given is a tariff increase of 3% to 18 months.