Foundations and Perspectives of Trade Union Wage Policy in Europe

Considering the degree of political and economic integration in Europe, trade unions can no longer stick to purely national strategies. Since the 1980s the key political projects of European integration have played a major role to force the neoliberal reorganisation of European capitalism (Bieling and Steinhilber 2000). Especially the introduction of the European Monetary Union has turned out to be an important political catalyst, which put the need for a Europeanisation of wage policy and collective bargaining on the trade unions? agenda. A number of trade union initiatives have meanwhile developed, aiming at European coordination of wage policy. The first goal of these initiatives is to lay down a set of shared ground rules and objectives for national wage policy, which are supposed to prevent competitive underbidding of labour costs and wage dumping. Although the majority of these initiatives are still on their initial stages one can already identify several points of contention and impediments to full success, which might obstruct effective collective bargaining coordination. The experience hitherto indicates that it will not be enough to establish collective bargaining coordination as a mere technocratic procedure. The trade unions need an overarching political project instead, which will amount to nothing less than striving for a reconstruction of solidaristic wage policy in Europe. --

Europeanisation of collective bargaining: An overview on trade union initiatives for a transnational coordination of collective bargaining policy

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Industrial relations and European integration

Sammelbesprechung zu: (1) Keller, Berndt/ Hans-Wolfgang Platzer (eds.) (2003): Industrial Relations and European Integration. Trans- und Supranational Developments and Prospects. Aldershot: Ashgate, 192 pp. (2) Kohl, Heribert/ Hans-Wolfgang Platzer (2004): Arbeitsbeziehungen in Mittelosteuropa. Transformation und Integration - die acht EU-Beitrittsländer im Vergleich. 2., neu bearb. u. aktual. Aufl., Baden-Baden: Nomos, 335 pp. (3) Kohl, Heribert/ Hans-Wolfgang Platzer (2004): Industrial relations in Central and Eastern Europe. Transformation and integration. A comparison of the eight new EU member states. Brussels: ETUI. 422 pp. (4) Marginson, Paul/ Keith Sisson (2004): European Integration and Industrial Relations. Multi-level Governance in the Making. Basingstoke: Palgrave Macmillan, 360 pp

Unemployment, Wages and Collective Bargaining in the European Union

The paper questions the predominant view on unemployment and wages in the European Union according to which high unemployment is primarily caused by labour market rigidities, i.e. social institutions and regulations which prevent ?market-clearing? real wage levels and structures. It is shown that the foundations of that view coming either from neo-classical or new-Keynesian theory are not convincing, neither theoretically nor empirically. Analysing the developments in the EU during the last four decades, no strictly inverse relationship between real wage growth and unemployment can be found. On the contrary, persistently high unemployment has had strong adverse effects on nominal wage growth and on the labour income share. Weakened labour union bargaining power and changing collective bargaining strategies have contributed to this result. It is therefore concluded that the current EU economic and employment policies aiming at further wage restraint, wage differentiation and decentralisation of collective bargaining are deeply misguided and have to be replaced by an alternative wage policy in Europe as part of a growth and employment oriented coordination of macroeconomic policies. --European employment policy,wage theory,wage trends,collective bargaining

German collective bargaining in a European perspective: Continuous erosion or re-stabilisation of multi-employer agreements?

Since the mid-1990s the German system of collective bargaining with its traditional dominance of sector-level agreements has been faced by a process of creeping erosion. While the bargaining coverage has shown a steady decline, a far-reaching decentralisation has increasingly undermined the system of multi-employer bargaining. Compared with other European countries, the development in Germany seems to be rather ex-ceptional, as many countries were able to continue with a rather stable collective bargaining system and a relatively high bargaining coverage. This holds true also for countries where - as in Germany - the unions were faced by a significant decline of organisational power. The latter indicates that there are other political factors which seem to compensate for the decline of unions' organisational power and keep their institutional power basis relatively stable. In discussing German collective bargaining in a European perspective it is the aim of this paper to identify the factors which support a stable and encompassing collective bargaining system. Our arguments are developed in three steps: First, we describe the recent developments in German collective bargaining and the accompanying changes in the organisational and structural power of German trade unions. Secondly, we compare the German situation with the development in other European countries and analyses the factors which are conducive for a stable bargaining sys-tem. Considering the different experiences in Europe, we thirdly discuss the possibilities for a restabilisation of German collective bargaining. --

Macroeconomic policies, wage developments, and Germany's stagnation

The paper fundamentally challenges the institutional sclerosis explanation of the present German economic stagnation. Instead we present a macroeconomic explanation focusing on the combined effects of too restrictive monetary policies, too restrictive and sometimes pro-cyclical fiscal policies and overly moderate wage policies in Germany since the mid 1990s. This view is broadly consistent with modern macroeconomics and with empirical data. From this perspective we finally argue that Germany urgently needs more expansive fiscal and monetary policies in the short run, and that in the medium run the conditions for nominal wage growth in Germany according to the sum of long run national productivity growth and the ECB's inflation target have to be improved. Further pursuing a policy of structural reforms with respect to the labour market and the social benefit system in combination with a restrictive macroeconomic policy mix, however, will prolong Germany's economic stagnation and will considerably increase the risk of deflation.monetary policy, fiscal policy, structural reform

Labour Market Institutions in Germany : Current Status and Ongoing Reforms

As the German employment system can be generally characterised as highly protective and favourable to employees in respect to their labour rights, democratic participation in the economic sphere and the level of social protection, this article addresses the question of the consequences of these two diametrical strategies for the underlying principles of the German employment system. The main argument will show that intentional government reforms are a factor that only partly accounts for the ongoing basic changes. Other factors that influence the system are ongoing changes in social practices and initiatives or rulings by supra-national organisations. --

Germany's post-2000 stagnation in the European context - a lesson in macroeconomic mismanagement

In the present paper we question the mainstream diagnosis of Germany’s post-2000 stagnation as well as the prescribed remedies. We show that the ‘institutional sclerosis’ view of Germany’s stagnation is unfounded and that therefore the political measures proposed and actually taken are misguided. Instead, we claim that macroeconomic mismanagement explains the German absolute and relative stagnation compared with the Euro area as a whole and with the USA. If the problem of macroeconomic mismanagement is not addressed and solved, irrespective of occasional cyclical upswings, we predict a continuing stagnation tendency for the German economy. And we argue that this is not only a German problem, but a matter of European concern, because the macroeconomic policies which have caused the German constellation will have major negative feedback effects on the other Euro area countries in the near future.Macroeconomic policy, structural reforms, unemployment, growth, inflation

Wage trends and deflation risks in Germany and Europe

Based on a post-Keynesian model of the relationship between wages, prices and employment, this paper begins by studying the extent to which unit labour cost trends have been responsible for disinflation and deflationary tendencies in Germany and Europe. Thereafter, the reasons for the deflationary development of unit labour costs in recent years, in particular in Germany, are analysed. Finally, the impact of deflationary wage policies on German and European stagnation are discussed and it is concluded that the excessive wage restraint in Germany not only exacerbates stagnation and deflationary tendencies in Germany but might also have a deflationary impact on the other EMU countries.Wage trends, deflation, collective bargaining