INDUSTRIAL RELATIONS

LECTURE 5
INDUSTRIAL RELATIONS IN GERMANY
IDEA.int
IDEA.int
SOZIALISTENGESETZE
LAWS AGAINST SOCIALISTS 1878
 Temple
University
Press 1987

PETER J. KATZENSTEIN
UP UNTIL THE END OF THE 1980s
DECENTRALIZED
STATE
US AMERICAN
CHECKS AND
BALANCES
THREE PRINCIPLES OF GERMAN GOVERNMENT
HIGHLY
CENTRALIZED
SOCIAL ASSOCIATIONS
PARTICULARLY IN ECONOMIC SECTOR
CONNECTING NODES OF THE GERMAN POLITICAL
SYSTEM
LAST ELECTIONS 30 SEPT 2017
Party 2009 2005

SPD 23.0 34.2

CDU 27.3 27.8

FDP 14.6 9.8

The Left Party 11.9 8.7

Alliance 90/The Greens 10.7 8.1

CSU 6.5 7.4

Others
2019
INDUSTRIAL RELATIONS IN
GERMAN DEMOCRATIC
REPUBLIC
INDUSTRIAL RELATIONS IN
GERMAN DEMOCRATIC
REPUBLIC
INDUSTRIAL RELATIONS IN
GERMAN DEMOCRATIC
REPUBLIC
INDUSTRIAL RELATIONS IN
GERMAN DEMOCRATIC
REPUBLIC
INDUSTRIAL RELATIONS IN
GERMAN DEMOCRATIC
REPUBLIC
1989:
LEAVING THE COUNTRY THROUGH
CZECHOSLOVAKIA AND HUNGARY
‘ABSTIMMUNG MIT DEN FÜßEN
ROOTS OF SOCIAL MARKET ECONOMY
SOZIALE MARKTWIRTSCHAFT
 ELEMENTS OF
WALTER EUCKEN’S
NEOLIBERALISM
 ELEMENTS OF
WALTER EUCKEN’S
NEOLIBERALISM
 ELEMENTS OF
WALTER EUCKEN’S
NEOLIBERALISM
SOCIAL MARKET ECONOMY
1946 developed by Alfred Müller-Armack, an
economist and secretary of state in the department of
economy between 1952 and 1963
Added social dimension to Eucken’s neoliberal
model
 MÜLLER-ARMACK’S
SOCIAL MARKET ECONOMY
 • For LUDWIG
ERHARD . first
economy minister of
the Federal
Republic, Müller-
Armack’s model was
too expansive,
• however he shared
many of its
principles,
particularly equality
of opportunities

Ludwig Erhard
1897-1977
SOCIAL MARKET ECONOMY
VS. PLANNED ECONOMY

PLANNED ECONOMY OF NS-

PERIOD

SOCIAL
MARKET
ECONOMY
PLANNED ECONOMY OF GDR
PLAN OVER SEVERAL YEARS
COMPRISING EVERY ASPECT
OF ECONOMIC AND SOCIAL
LIFE
 CONSENSUS OF
POLITICAL PARTIES
THE VOLKSPARTEI
 KARL SCHILLER(1911-1994)
Economy Minister 1966-72+Finance Minister 1971-2
Further consolidated Social Market Economy
 DEMAND
Freedom of MARKET SUPPLY
Consumption Prices Freedom of
Competition Production
Quality

REGULATORY INPUT

•Law against •Striving for technical

•Regulatory
damage of progress
•Economic and efficient frameworks for
competition sectors which are
use of production
•Abuse of state disadvantaged by
factors
oversight •Orientation of competition(agricult
production to buying ure)
wishes

SOCIAL STATE
•Removal of shortage of goods distribution
•Promotion of equality of opportunities
•Organisation of a solidarous welfare state
 KONZERTIERTE AKTION 1967-1977:
NEOCORPORATIST EXPERIMENT

UNILATERAL MONETARIST POLICY OF BUNDESBANK IN 1976

VETO PLAYER FOR GOVERNMENT
 LEGAL FRAMEWORK

BASIC LAW
1949

Article 20 [Basic institutional

principles; defense of the
constitutional order]
(1) The Federal Republic of
Germany is a democratic and
social federal state
LEGAL FRAMEWORK
 LEGAL FRAMEWORK

Law for collective

bargaining 1949
(Tarifvertragsgesetz)

COLLECTIVE AGREEMENT
AUTONOMY

(TARIFAUTONOMIE)
BIPARTITE
 LEGAL FRAMEWORK

Co-participation law
1975
Mitbestimmungsgesetz
POSSIBILITY OF LABOUR REPRESENTATIVES TO TAKE
PART IN SUPERVISORY BODIES OF LARGER
ENTERPRISES IN
EQUAL NUMBER WITH MANAGEMENT
REPRESENTATIVES
QUITE UNIQUE ACROSS THE EUROPEAN UNION
GERMAN TRADE UNION CONFEDERATION
DEUTSCHER GEWERKSCHAFTSBUND
FOUNDED IN 1949-62 YEARS OF EXISTENCE
 2

1,28 million members , 40 affiliated associations

278,000 members
16 associations
Further non-aligned associations comprising
270,000
Members
4
 CONFEDERATION
OF EMPLOYERS’ ASSOCIATIONS
(BUNDESVEREINIGUNG DER
ARBEITGEBERVERBÄNDE)
FOUNDED IN 1949

55 BUNDESFACHVERBÄNDE
14 LANDESVEREINIGUNG

COORDINATION IN TERMS OF INDUSTRIAL

RELATIONS
 EMPLOYER ASSOCIATIONS
DENSITY 63 %

36 member associations of the BDI,

including two associations
representing the interests of some.
100 000 companies with 8 million employees
WOLFGANG SCHROEDER, MODELL DEUTSCHLAND
UND DAS BÜNDNIS FÜR ARBEIT,PP.107-147
GERMAN ECONOMY AND EUROPEAN UNION

HANDELSBLATT,ONLINE 5.Februar 2010,

HANDELSBLATT ONLINE, 24.November .2010
REACTIONS TO EUROPEANIZATION
GERMANY:ABSORPTION
1980s and 1990s
 Elites, 1 %

Middle classes
20 %
Workers’ elite,5 %
Services
class,12 %
CLASSES,12 %
FALSE MIDDLE

Workers 45 %

Lower
Stratum 5 %
 Power elite,1 %

(1980S) Old bourgeois middle classes, 7 %)

Geißler,1992:76

New middle classes Farmers,6 %

Services classes,28 %

Workers’ elite,12 % Foreign skilled

workers,1 %

Skilled workers,18 %
Foreign unskilled
Executing services stratum,9 % Workers,4 %

Unskilled workers,15 % Poverty

threshold,4 %
Marginal strata, 5-6 %
• KOHL YEARS 1982-98
–Committed to
restructuring welfare
state
–Increase
competitiveness of
German economy
• KOHL YEARS(1982-1998)

Some consolidation
was achieved at
the end on the eve
of Reunification.
•
• KOHL YEARS 1982-98
• There was no pattern of
reform. Tendency to cut
benefits across the board
• Strong family policy
( payments for children)
• Labour reform remained
untouched
8 Social
Policy: Crisis
and
Transformati
on

Roland
Czada
pp.165-189
CSADA 2005:168
• KOHL YEARS 1982-98
 Use of early retirement to
solve major restructuring
of the industrial sector
 Early retirement at an early
age, this led to increase of
social expenditure
 Growing problem of ratio
between retirees at normal
age and early retirees
PHILIP G.
CERNY

(1990 )
• KOHL YEARS 1982-98
 Problematic after
reunification, pensioneers
of the GDR had to be taken
over and pensions upgraded
to level of Federal Republic
of
Germany(Csada,2005:168)
• KOHL YEARS 1982-98
• After reunification a socalled
Vereinigungskonsens
between the political parties
allowed to an increase of
public expenditure for the
Eastern Länder
• Importance of solidarity
between two parts of
Germany
• KOHL YEARS 1982-98
• Importance of solidarity
between two parts of
Germany
• No learning from East
Germany social
policy:child care
provision
The reunification:west-east differences
in social benefits
SOZIALBERICHT
2005:194
CSADA,20
05:172
• KOHL YEARS 1982-98

 After 1996:
End of
Vereinigungs-
konsens
• KOHL YEARS 1982-98
 Kohl government under
pressure to reduce
public debt deficit and
budget deficit due to
impact of Economic
Monetary Union and
its Maastricht criteria
• KOHL YEARS 1982-98
 Beginning in the mid
1990s, governments had
to agree on growth and
stability pacts with the
social partners and
implement a
programme of economic
and monetary stability
• KOHL YEARS 1982-98
 The financial squeeze
had an impact on
welfare state
 Attempts of a labour
reform in 1996, but
refused by the
Socialdemocrats
• KOHL YEARS 1982-98
• Reduction of sick pay from
100 percent to 80 percent
• Pension credits in tertiary
sector reduced from 13
years to 3 years
• Pension rights for
expatriates of former Soviet
Union cut substantially
• Pension reform act of 1999
passed only with coalition
• SCHRÖDER YEARS(1998-2005)

 Started by
repealing the
legislation of
the late Kohl
government.
• SCHRÖDER YEARS(1998-
2005)

 Started by
repealing the
legislation of
the late Kohl
government.
• SCHRÖDER YEARS(1998-2005)

Pension system reform in

2001, changing the
retirement age, but also
introducing private
supplementary pension
schemes. Possibility of
voluntary Riester Rente
• SCHRÖDER YEARS(1998-2005)

Alliance for Labour(Bündnis für

Arbeit) between 1998 and
2002
• Formalised tripartite
forum to solve high level
of unemployment
• Not very successful in
tackling major problems
• SCHRÖDER YEARS(1998-2005)
 Second term:Labour
market reform
through the report of
a commission
dedicated to this
aspect under Peter
Hartz in 2002.
• SCHRÖDER YEARS(1998-2005)

•Agenda 2010
adopted by
the red-green
coalition (Die
Neue Mitte)
 ROBERT REICH
STATE SECRETARY FOR
LABOUR
(CLINTON
ADMINISTRATION)
1992-1997
1998
• Creation of the Hartz
Commission of 15 people
under Peter Hartz on 22
April 2002 which
developed proposals for
change of labour market.
• Commission on Modern
Services in Labour Market
HARTZ REFORM 2002
HARTZ REFORM
WOLFGANG
STREECK
INDUSTRIAL RELATIONS
PP.138-165
NEGATIVE DEVELOPMENT OF
MODELL DEUTSCHLAND
NEGATIVE DEVELOPMENT OF
MODELL DEUTSCHLAND