Winning the battle or losing the war: the impact of European integration on labour market institutions in Germany and Denmark

ABSTRACT

The European Union (EU) literature sees increasing market liberalization as a challenge for models of national capitalism. EU liberalization, it is argued, erodes national employment regimes and social protection. However, other scholars highlight the ability of national institutions to reinvent themselves. This contribution assesses these claims by exploring an extreme case of labour market pressure driven by EU liberalization. Focusing on the meat production sector, it shows that low-wage labour migration has affected employment conditions in the meat production sector in Germany and Denmark in different ways: dualization has made Germany a destination country for low-wage work; in contrast, union solidarity in Denmark has kept wages high and Danish meat producers have outsourced work to Germany. The underlying industrial relations systems have shaped actors’ responses to the use of migrant labour.

KEY WORDS:

• Dualization
• European integration
• labour market institutions
• labour migration
• union solidarity

Acknowledgements

We thank Marius Busemeyer, Andrew Martin and Michael Piore for helpful comments on earlier versions. We also acknowledge helpful discussions at the 2014 Council of European Studies Conference in Washington DC and at the 2015 European Union Studies Association Conference in Boston.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Anke Hassel is professor of public policy at the Hertie School of Governance in Berlin.

Jette Steen Knudsen is Shelby Cullom Davis Professor in International Business with a focus on sustainability at the Fletcher School of Law and Diplomacy, Tufts University.

Bettina Wagner is a researcher on labour migration and industrial relations and is currently co-ordinating the transnational programme ‘Enacting – Enable’, co-operation and mutual learning for a fair posting of workers, funded by the European Commission.

ORCID

Jette Steen Knudsen http://orcid.org/0000-0002-2084-8063

Notes

1. European integration scholars have argued that a high degree of misfit between the existing institutional regulatory traditions and the new, imposing European rules, suggests more problematic adjustment procedures (Börzel 2000; Duina 1997; Martinsen 2015).

2. We know about national variation when it comes to the implementation and compliance with EU directives (Falkner et al. 2004). In this contribution, we are interested in the response by national institutions.

3. Migration in itself poses fiscal pressures and threats to solidarity that can dampen enthusiasm for welfare compensation and spark calls for welfare retrenchment (Burgoon 2012). However, these studies have focused on migrants that benefit from welfare services. In this contribution, we focus on labour migrants.

4. Case C-113/89 Rush Portuguesa v. Office national d’immigration (1990).

5. These three decisions by the European Court of Justice refer to the following cases: C-341/05 Laval un Partneri Ltd v. Svenska Byggnadsarbetareförbundet, Svenska Byggnadsarbetareförbundets avd. 1, Byggettan, Svenska Elektrikerförbundet [18/12/2007]; C-346/06, Rechtsanwalt Dr. Dirk Rüffert v. Land Niedersachsen, U. v. 3.4.2008, Slg. 2008, I-01989; C-438/05 The International Transport Workers’ Federation and The Finnish Seamen’s Union v. Viking Line ABP and OÜ Viking Line Eesti [11/12/2007].

6. This section is based on empirical evidence collected using in-depth, qualitative interviews with representatives from labour, employers and government representatives that were carried out during the period October–December 2013.

7. This section is based on empirical evidence collected using in-depth, qualitative interviews with representatives from labour, employers and business representatives that were carried out during the period August 2013–November 2015.

8. These plants were Danish Crown Esbjerg (closed in August 2012); Danish Crown Fårvang (closed in January 2014), Danish Crown Holstebro – Cows (closed in March 2012); Danish Crown Holstebro – Pigs (closed in 2009) and Danish Crown Skjern (closed in June 2014).

Additional information

Funding

We thank Copenhagen University for funding part of this project.