Old bottles – new wine: The new dynamics of industrial relations

Abstract

This contribution engages recent debates in comparative political economy, arguing that labels such as divergence or convergence are ultimately unsatisfactory in analysing German industrial relations and labour market policy. The persistence of formal institutions goes hand in hand with rapid and dramatic change – a neo-liberal re-orientation among political elites in government and a more bellicose stance on the part of employers. Business attempts to shift the bargaining arenas to the micro-level, knowing that at this level its bargaining power is greater and its exit threat more compelling. However, internal divisions within the employers and the unions further complicate the picture. Business does not simply exit, it seeks to press for advantageous outcomes within existing institutions.

Notes

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2. Peter A. Hall and David Soskice (eds.), Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (Oxford: Oxford University Press, 2001); Kathleen Thelen, ‘Varieties of Labor Politics in the Developed Democracies’, in Hall and Soskice (eds.), Varieties of Capitalism, pp.72–103.

3. Streeck, Les capitalismes en Europe; Anke Hassel and Wolfgang Streeck, ‘The Crumbling Pillars of Social Partnership’, in Herbert Kitschelt and Wolfgang Streeck (eds.), Germany: Beyond the Stable State (London: Frank Cass, 2004, Special Issue of West European Politics 26/4), pp.101–24; Jürgen Bayer and Martin Höpner, ‘The Disintegration of Organised Capitalism: German Corporate Governance in the 1990s’, in Kitschelt and Streeck (eds.), Germany: Beyond the Stable State, pp.180–97.

4. Yamamura and Streeck, The End of Diversity; Susanne Lütz, ‘Convergence within National Diversity: A Comparative Perspective on the Regulatory State in Finance (Cologne, MPIfG Discussion Paper 07/03, 2003).

5. Karl Polanyi, The Great Transformation (Boston: Beacon Press, 1957); Andrew Shonfield, Modern Capitalism (New York: Oxford University Press, 1969); Peter Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ithaca, NY: Cornell University Press 1985); Fritz W. Scharpf, Crisis and Choice in European Social Democracy (Ithaca, NY: Cornell University Press, 1991); Suzanne Berger and Ronald Dore (eds.), National Diversity and Global Capitalism (Ithaca, NY: Cornell University Press, 1996); Herbert Kitschelt, Peter Lange, Gary Marks and John D. Stephens, ‘Convergence and Divergence in Advanced Capitalist Democracies’, in Herbert Kitschelt, Peter Lange, Gary Marks and John D. Stephens (eds.), Continuity and Change in Contemporary Capitalism (Cambridge: Cambridge University Pres, 1999), pp.427–60; David Soskice, ‘Divergent Production Regimes: Coordinated and Uncoordinated Market Economies in the 1980s and 1990s’, in Kitschelt et al. (eds.), Continuity and Change in Contemporary Capitalism, pp.101–35.

6. Rudi Dornbusch, ‘The End of the German Miracle’, Journal of Economic Literature 31/3 (1993), pp.881–5; Berliner Zeitung, 15 April 1997; 15 July 1996; Horst Siebert, ‘Labor Market Rigidities: At the Root of Unemployment in Europe’, Journal of Economic Perspectives 11 (Summer 1997), pp.37–54; BDI, ‘Internationale Wettbewerbsfähigkeit – Benchmarking’ [International Competitiveness – Benchmarking] (2002). Available at http://www.bdi-online.de (accessed 5 June 2003); Bertelsmann Stiftung, Internationales Beschäftigungs-Ranking (Gütersloh, 2002).

7. Berliner Zeitung, 20 Sept. 1997; Berliner Zeitung, 26 Nov. 1996.

8. Berger and Dore, National Diversity; Kitschelt et al., ‘Convergence and Divergence’; Fritz W. Scharpf and Vivien A. Schmidt (eds.), Welfare and Work in the Open Economy: From Vulnerability to Competitiveness (Oxford: Oxford University Press, 2000); Fritz W. Scharpf and Vivien A. Schmidt (eds.), Welfare and Work in the Open Economy: Diverse Responses to Common Challenges (Oxford: Oxford University Press, 2000); Hall and Soskice, Varieties of Capitalism; Vivien A. Schmidt, The Futures of European Capitalism (Oxford/New York: Oxford University Press, 2002). For a sceptical view see Mark Blyth, ‘Same as it Never Was: Temporality and Typology in the Varieties of Capitalism’, Comparative European Politics 1/1 (2003), pp.215–25.

9. Hall and Soskice, Varieties of Capitalism, p.103.

10. Thelen, ‘Varieties of Labor Politics’, pp.75ff.

11. Anke Hassel ‘The Erosion of the German System of Industrial Relations’, British Journal of Industrial Relations 37/3 (1999), pp.484–505; DIW – Deutsches Institut für Wirtschaftsforschung Berlin, in cooperation with Institut für Weltwirtschaft an der Universität Kiel and Institut für Wirtschaftsforschung Halle (1999), Gesamtwirtschaftliche und unternehmerische Anpassungsfortschritte in Ostdeutschland [Macroeconomic and enterprise-level progress in adaptation in Eastern Germany]. Available at http://www.diw.de/deutsch/publikationen/wochenberichte/docs/99-23-1.html#FN11 (accessed on 5 June 2004); Hassel and Streeck, ‘The Crumbling Pillars’; Damian Raess, ‘“Time is Ripe” Bargaining Round: Globalisation, Employers and the German System of Industrial Relations’, paper prepared for delivery at the ECPR Workshop ‘Changing Industrial Relations in Contemporary Capitalism’, Uppsala, Sweden, 13–18 April 2004.

12. Wolfgang Streeck, ‘The Internationalization of Industrial Relations in Europe: Prospects and Problems’ (Cologne: MPIfG Discussion Paper 98/2, 1998), p.15.

13. See for example: Berliner Zeitung 15 July 1996, 20 September 1997.

14. Gerhard Schröder and Anthony Blair, ‘Der Weg nach vorne für Europas Sozialdemokraten’ [The Way Forward for Europe's Social Democrats], Blätter für deutsche und internationale Politik 7 (1999). The paper emphasises that ‘competitiveness’ is best secured by reducing taxes on corporations and high-income earners and capping public expenditure, while reducing labour and social protection. It advocates ‘competition in the product markets and free trade [which] are of pivotal importance for the stimulation of productivity and growth’ (p.2). Government's role is to do ‘all it can to support enterprise but never believes it is a substitute for enterprise’ since ‘the essential function of markets must be complimented and improved by political action, not hampered by it’. Similarly, ‘corporate taxes should be simplified and the income tax reduced’ while to ‘make the European economy more dynamic, we have to make it more flexible as well’ (p.4). In rhetoric plainly reminiscent of the US New Democrats, the authors ‘expect … that everyone accepts the [job] opportunities afforded to him’ since ‘part-time work and seasonal work is better than no work’.

15. Schröder and Blair, ‘Der Weg nach Vorne’, pp.6–7.

16. Financial Times Deutschland, 29 May 2002.

17. Daniel Kinderman, ‘Pressure from Without, Subversion from Within: The Two-Pronged German Employer Offensive’, paper prepared for delivery at the American Political Science Association Annual Conference, Chicago, Sept. 2004.

18. DIW, Gesamtwirtschaftliche Anpassungsfortschritte, 1999.

19. DIW, Gesamtwirtschaftliche Anpassungsfortschritte, 1999.

20. Figures provided by the association, quoted in Hassel and Streeck, ‘The Crumbling Pillars’, p.23 and Raess, ‘Time is Ripe’, p.30.

21. Figures cited in Hassel, ‘The Erosion of the German System of Industrial Relations’, p.495; Hassel and Streeck, ‘The Crumbling Pillars’, p.23.

22. EIRO, Collective Bargaining Coverage in Western Germany (2002).

23. Ibid.

24. Cited in: Hassel, ‘The Erosion of the German System of Industrial Relations’, p.500.

25. Kinderman, ‘Pressure from Without’; EIRO, Collective Bargaining Coverage in Western Germany (2002); EIRO, Collective Bargaining System under Pressure (2003).

26. Figures cited in Hassel, ‘The Erosion of the German System of Industrial Relations’, p.500.

27. S. Kohaut and L. Bellmann, ‘Betriebliche Determinanten der Tarifbindung: Eine empirische Analyse auf der Basis des IAB-Betriebspanels 1995’, Industrielle Beziehungen 4 (1997), p.323.

28. EIRO, Siemens Deal Launches Debate on Longer Working Hours (2004).

29. Der Standard, 28 June 2001, 29 Aug. 2001.

30. Frankfurter Rundschau, 23 July 2003; Raess, ‘Time is Ripe’.

31. Bertelsmann Stiftung, Internationales Beschäftigungs-Ranking, 2002

32. Frankfurter Rundschau, 27 June 2002; 9 Sept. 2004; 15 Sept. 2004.

33. Berliner Zeitung, 2 June 2003; 3 June 2003; Frankfurter Rundschau, 16 June 2003; Berliner Zeitung, 30 May 2003; 2 June 2003.

34. According to calculations by Peter Wahl of NGO attac, cited in ‘Bundesregierung sagt die Unwahrheit’, press release 16 Sept. 2004.