Institutional change in the German wage bargaining system: The role of big companies

Despite the emergence of new production systems, Europeanization and economic internationalization, the national arrangements of wage bargaining systems have not been eroded. The paper highlights the factors that counteract the pressures for a straightforward decentralization with reference to Germany. Firstly, the maintenance of peaceful labour relations is a major advantage for big companies in centralized wage bargaining systems. Secondly, big companies have been able to achieve labour cost control and the differentiation of working conditions by drawing up pacts for employment and competitiveness at the company level. Thirdly, they have succeeded in introducing a higher degree of flexibility into the collective agreement framework. The main argument will be that institutional change has taken other forms than expected. Whereas the formal institutional setting has remained relatively stable, the functioning of the German wage bargaining system has changed. -- Trotz der Verbreitung neuer Produktionssysteme, der Europäisierung und der wirtschaftlichen Internationalisierung sind nationale Tarifverhandlungssysteme in den meisten Ländern stabil geblieben. Dieses Working Paper hebt am Beispiel Deutschlands die Faktoren hervor, die dem Dezentralisierungsdruck entgegen wirken. Für Großunternehmen ist auch unter veränderten Bedingungen die Vermeidung von Konflikten einer der Hauptvorteile zentraler Tarifverhandlungssysteme. In dem gegebenen institutionellen Rahmen haben Unternehmen Möglichkeiten gefunden, über Standortsicherungsvereinbarungen auf Unternehmensebene die Arbeitsorganisation zu flexibilisieren und Arbeitskosten zu senken. Zudem konnten sie Tarifverträge flexibler gestalten und Öffnungsmöglichkeiten einfügen. Als Ergebnis wird festgehalten, dass institutionelle Veränderungen andere Formen angenommen haben als erwartet. Während die formalen institutionellen Rahmenbedingungen verhältnismäßig stabil geblieben sind, hat sich die Funktionsweise des deutschen Tarifverhandlungssystems verändert.

Wage setting, social pacts and the Euro: a new role for the state

Globalization, financial liberalization and neo-liberal economic policy thinking have been seen as contributors to the demise of social partnership in Western Europe. Recent examples of the re-emergence of social pacts have challenged these assumptions. The book offers a theoretical understanding of the challenges that increasing monetary integration posed for existing modes of adjustment in the political economies of EU member states, and explains why many governments have chosen to negotiate with trade unions over economic adjustment.Door de Europese monetaire integratie staan overheden voor een enorme economisch-politieke uitdaging. Niet langer kunnen ze door middel van waarde-inflatie de economische tekorten oplossen. Het gevolg was dat de Eurolanden loonbepalingen gebruiken om de economie bij te sturen. Opmerkelijk is dat in tegenstelling tot de wijdverbreide verwachting, loonbepalingssystemen in West-Europa de laatste 25 jaar gecentraliseerd zijn gebleven. En de band tussen overheden en sociale partners zijn eerder inniger dan losser geworden. Hassel onderzoekt in Wage Setting, Social Pacts and the Euro. A New Role for the State loonbepalingssystemen in West-Europa. Ze laat zien dat overheden hebben gekozen voor onderhandelingen met de sociale partners en niet voor de deregulering van de arbeidsmarkten. Hassel brengt de economische en politieke voordelen van de onderhandelde loonbepalingen naar voren, tegen de achtergrond van een strikter monetair beleid en een toegenomen economische openhei

Wage Setting, Social Pacts and the Euro

Globalization, financial liberalization and neo-liberal economic policy thinking have been seen as contributors to the demise of social partnership in Western Europe. Recent examples of the re-emergence of social pacts have challenged these assumptions. The book offers a theoretical understanding of the challenges that increasing monetary integration posed for existing modes of adjustment in the political economies of EU member states, and explains why many governments have chosen to negotiate with trade unions over economic adjustment

Case Study: Deutsche Telekom and "Schools Online" (SaN). Connecting German Schools to the internet

The CEO of Deutsche Telekom, Ron Sommer, and Jürgen Rüttgers, current prime minister of North Rhine-Westphalia, founded “schools online” (in German: “Schulen ans Netz”, and short: SaN) in 1996 with the goal of connecting German schools to the internet. In his opening speech, Ron Sommer said the commitment of Deutsche Telekom was made on the grounds of its responsibility towards society. Deutsche Telekom wanted to display good corporate citizenship in an area that was close to its business and expertise. He also claimed the money spent was an investment into the future rather than a sponsoring activity. An early employee, Nikolaus Huss, responsible for public relations at SaN said: “There never was any clear indication as to what the goal was. It was never really made clear whether there was more to it than corporate citizenship. It was understood among us that somehow Telekom felt responsible for electronic alphabetisation and on the other hand was sure to profit from this later on, although nobody really felt it necessary to plan the future outcome.

Institutional change in the German wage bargaining system: the role of big companies

"Trotz der Verbreitung neuer Produktionssysteme, der Europäisierung und der wirtschaftlichen Internationalisierung sind nationale Tarifverhandlungssysteme in den meisten Ländern stabil geblieben. Dieses Working Paper hebt am Beispiel Deutschlands die Faktoren hervor, die dem Dezentralisierungsdruck entgegen wirken. Für Großunternehmen ist auch unter veränderten Bedingungen die Vermeidung von Konflikten einer der Hauptvorteile zentraler Tarifverhandlungssysteme. In dem gegebenen institutionellen Rahmen haben Unternehmen Möglichkeiten gefunden, über Standortsicherungsvereinbarungen auf Unternehmensebene die Arbeitsorganisation zu flexibilisieren und Arbeitskosten zu senken. Zudem konnten sie Tarifverträge flexibler gestalten und Öffnungsmöglichkeiten einfügen. Als Ergebnis wird festgehalten, dass institutionelle Veränderungen andere Formen angenommen haben als erwartet. Während die formalen institutionellen Rahmenbedingungen verhältnismäßig stabil geblieben sind, hat sich die Funktionsweise des deutschen Tarifverhandlungssystems verändert." [Autorenreferat]"Despite the emergence of new production systems, Europeanization and economic internationalization, the national arrangements of wage bargaining systems have not been eroded. The paper highlights the factors that counteract the pressures for a straightforward decentralization with reference to Germany. Firstly, the maintenance of peaceful labour relations is a major advantage for big companies in centralized wage bargaining systems. Secondly, big companies have been able to achieve labour cost control and the differentiation of working conditions by drawing up pacts for employment and competitiveness at the company level. Thirdly, they have succeeded in introducing a higher degree of flexibility into the collective agreement framework. The main argument will be that institutional change has taken other forms than expected. Whereas the formal institutional setting has remained relatively stable, the functioning of the German wage bargaining system has changed." [author's abstract

Trade unions as political actors

"Modern trade unions act in two arenas: the state and politics on the one hand, and the labour market and collective bargaining on the other. The relative importance of their economic and political activities differs between countries and world regions, as well as historically and between types of unions. So do the way and the extent to which union action in the two arenas is coordinated. The dominant kind of trade union as it emerged from the second postwar settlement after 1945 no longer claimed a right or reserved the option to overthrow the governmnt of the state through a political strike. In this they paid tribute to the superior legitimacy of free elections as compared to 'direct action' of the organized working class. Today more or less explicit constitutional law makes it illegal for unions - within the limits of usually complex legal rules - to strike in the context of disputes with employers and in pursuit of collective agreements on wages and working conditions." (excerpt

The platform effect: How Amazon changed work in logistics in Germany, the United States and the United Kingdom

While the effects of the platform economy on work are mainly studied through the lens of gig or cloud workers, many more employees are likely to be affected in non-platform firms or sectors. We discuss the mechanisms of platform economy’s impact on the employment relationships and indirect effect on employment trends. Platform firms enter the service economy with business models that put existing service providers under pressure and advance a platform model of employment relationship. However, their transformative force is limited by three factors: employment regulations, access to welfare provisions and the employment relations at legacy firms. We examine the case of Amazon logistics in the US, Germany and the UK and find that the employment contract, as a legal institution, prevents the dissemination of independent contracting as the preferred employment model. Moreover, the welfare state has a paradoxical effect on platform work: universal welfare and liberal employment law facilitate the rise of precarious work

Two dimensions of the internationalization of firms

The debate about measuring the degree of internationalization of firms has not solved the question about the usefulness of having one index on the internationalization of firms. This article argues in favour of constructing indices, if the components of those are theoretically and empirically coherent. It also proves empirically that there are at least two dimensions of internationalization: one referring to the activities of firms abroad and one relating to the proximity of the firm to international capital markets. Using a sample of the 100 largest German companies, this study shows that both dimensions, the real and the financial one, do not co-vary and therefore cannot be combined into one index. -- Um den Einfluß wirtschaftlicher Internationalisierung auf nationale Institutionengefüge zu überprüfen, werden geeignete Meßverfahren zur Messung von Internationalisierung benötigt. Der Beitrag stellt ein Verfahren zur Messung der Internationalisierung von Unternehmen vor. Dabei wird davon ausgegangen, daß die Internationalisierung von Unternehmen mehrere unterscheidbare Dimensionen hat. Die realwirtschaftliche Dimension beschreibt die güter- und produktionswirtschaftliche grenzüberschreitende Expansion der Unternehmen, während die kapitalmarktbezogene Dimension die Orientierung der Unternehmen an internationalen Kapitalmärkten abbildet. Anhand einer Untersuchung über den Internationalisierungsgrad der 100 größten deutschen Unternehmen werden beide Internationalisierungsdimensionen empirisch überprüft. Die Faktorenanalyse unterstützt die Annahme, daß sich beide Dimensionen empirisch deutlich voneinander unterscheiden lassen. Anhand der vorgestellten Messmethoden lassen sich die Unternehmen eindeutig in stark und schwach internationalisierte Unternehmen einteilen.