Conference on Organized labour
Responses to the Conference Paper
Rainer Dombois
University of Bremen, Germany
29 September 1998
Thank you very much for inviting me to participate in the network. The Institute elaborated an interesting and very comprehensive agenda which in my view points at the strategic problems of trade union movements. I did not treat all issues.
Changing Patterns of Employment and Union Membership
Like in other Early Industrialized Countries in Germany there is a steady transformation of the employment structure towards services at the expense of manufacturing. This tendency is not so obvious in the traditional statistics which attribute firms to sectors according to their main product profiles. According to the traditional statistics there seems to exist a service gap in Germany because service sector employment is much lower than in the USA and in England. More thorough investigation that takes account of the service areas within the secondary sector's firms leads to different results: 1. like in the USA nearly three quarters of all workers are employed in services; 2. German manufacturing firms still integrate service functions in a higher degree in spite of the clear tendency to outsourcing. So, altogether, manufacturing jobs have dramatically decreased (now holding a bit more than 10% of total employment) and the change towards the service society is not only to be observed between secondary and tertiary sectors' firms but within the secondary sector as well. These tendencies are accompanied by the growing importance of small and middle enterprises in the employment system, a great part of them employing white collar workers with higher qualifications; but many new service firms are based on low paid and low qualification jobs.
As for the forms of employment a drastic transformation can be observed. In the after war period that was characterized by rapid economic growth, generalization of salaried labour and the expansion of the welfare state, a type of a 'normal employment pattern' emerged that included: a) the dominance of full time jobs subject to regulation by law as well as collective bargaining; b) steady and stable work trajectories based on vocational training or professional formation. This normal employment pattern emerged in a time of low labour participation of women and, indeed, implicitly protected male German workers.
This pattern has been eroding. Whereas in the seventies 85% of jobs were regular full time jobs now it`s rate has decreased to a bit more than sixty %. A broad sector of 'atypical' employment - part time work, temporary contracts, subcontracting and formally independent work - has evolved. In particular, there is now a huge group of low paid workers ( 12% of total employment in West Germany) with part time contracts which are not involved in social security. This erosion of the normal employment pattern is due not only to changes in the employment structure, but to changes in the supply side, too : to mass employment and -last not least to growing labour participation of women many of whom look for part time jobs in order to be able to integrate job and family work. Mass unemployment and the erosion of the normal employment pattern have destabilized former patterns of normal work trajectories creating new segmentation lines between generations and groups of workers according to skills and gender. As a consequence, there is a dramatic increase of unstable, discontinous 'Patch work trajectories' that imply not only unstable living conditions, but will result in serious future problems of social security for many workers, particularly of the younger generation because pension rights in the German Social Security system are tied up to the length of previous employment and the contributions to the Social Security funds.
So, this transformation of industries and employment creates very serious new problems for unions to deal with. Unons which in Germany are organized on the industry level have reacted in different ways:
1. As industry and employment structures are changing and former lines between sectors and jobs are blurring and new industries are surging, unions are in a process of internal reorganization. Various unions have merged; within the unions now organizational development projects have started.
2. As far the heterogenity of workers, in the German system of 'dual interest representation' traditionally there have been two levels of interest aggregation: an the level of the unions special committees were formed for different industries and groups of workers (white collar, women etc.) represented by the union. At the firm and plant level the work councils which are elected by the workers are the body which represents the different groups. This traditional system though it seems to promote fair opportunities for different groups of workers has been frequently criticized because 'minority interests' - of women, foreign workers, small scale industries) are not represented in a appropiate manner. This problem has increased by the erosion of the normal employment pattern. Interests are more heterogeneous; many workers - mostly women - look for some form of 'atypical' work - i. e. part time work - trying to match employment with other social needs. Unions have reacted by including ' atipical' work into the agenda of collective bargaining (part time work) in order to regulate it, and ask for the legal redefinition of unprotected low paid part time work to be included into social security. At the other hand, some unions have negotiated a further differention allowing for lower remuneration for entrants. Some unions formed unemployment committees.
3. As far as different firms situations, collective bargaining of the unions has been traditionally differentiated by industrial branches and subbranches and white collar and blue collar work. The restructuring of the economy poses new problems: a) the emergence of new 'post-taylorist' firms and forms of work that frequently do not fit into the patterns of traditional standard setting; b) the growing pressure of firms for 'taylor made', flexible rules which substitute for general industry standards. Unions have reacted by 'opening' industrywide agreements for firm specific agreements (in East German firms resulting in lowering standards), by negotiating flexibilization of working time ( sometimes as a trade-off for employment guarantees). The Metal Workers Union (IG Metall) negotiated a pioneer collective agreement in one of the big computer firms which corresponds to the specific forms of work and the type of workers in this dynamic industry which is difficultly to be organized. On the other hand, many collective agreements have flexibilized the working time by allowing for middle or even long term time budgets (for ex. annual time budget with flexible week working time and with free time as a compensation for previous overtime)
Anyway, the differentiation of industry structure, the increasing pressure of firms for decentralized taylor made regulation and the differentiation and segmentation of workers generate a threat for or a challenge to unions and collective bargaining, and viable responses have not be found that would reconcile the demand for generalized social standards and social equality, differentiated group interests , and increasingly heterogenous firms interests.
Change in Labour Management Relations
There is an increasing inclination of firms to leave (or not join) the employers associations and to get rid of obligations defined in collective agreemennts. On the other hand, there is a B tendency towards decentralization of Industrial Relations: industry`s pressure for changing the center of collective bargaining from the industry level (with unions and employers associations as actors) to the firm level (with works councils and management as actors); within the firms, the concept of work groups has spread.
Unions are still in a process of defining the way how to 'open' industry collective agreements for specific topics and areas to be negotiated at the firm level within a framework of general norms (e.g.,of remuneration ) and without giving up the union`s authority and control on collective bargaining. Collective agreements now frequently are including 'opening clauses' for specific topics (mostly flexibilization of working times, see above) which allow for firm specific agreements.
As for the HRM unions and work councils do not reject new forms of work organization but try to regulate them, mostly at the firm and plant levels. The IG Metall, for example, does an intensive consulting on how to regulate group work.
Challenges in a Hostile Economic Environment
Unions in Germany are acting in an economic and political context that is very different from the prosperous sixties and early seventies, when economic growth, full employment and the expansion of the welfare state came together. In the nineties they are facing problems of mass unemployment, economic and social disparities caused by the German unification and government policies that - though in the moderate manner of 'Rhine Capitalism' - are inspired by neoliberal thought. Unions since the eigthies in some areas are in a merely defensive position; in other areas they have developed new, creative approaches. They were very clearly defensive in the wage policies: wages increases remained below productivity increases, and since the eigthies there is a growing disparity between profits and salaries. On the other hand, they were able to defend the traditional scheme of sickness pay in collective agreements by mobilizing the membership against government legislation.
Unemployment and job stabilization have become central concerns of union policies. Unions have been active in different ways:
a) Till the early nineties working time reduction was a central topic in the agenda of collective bargaining. The IG Metall as a pioneer negotiated the 35 hours work week in its collective agreements. Whereas previously such agreements were spread by the collective bargaining of the other unions, the 35 hours norm week has not been generalized.
b) The IG Metall and the Confederation of German Trade Unions (DGB) proposed an social pact on Employment between unions, employers associations and the Government. The unions offered moderate pay increase demands in change for new jobs and apprenticeships and social security of unemployed. These initatives were not supported by the employers association und the government. There are some social pacts on the regional level; the pact in the Eastern region was canceled by the unions because the employers did not comply.
c) At the firm level a lot of collective agreements on job stability have been celebrated that are using forms of work sharing. The most famous one is that of the Volkswagen Company, where the Union negotiated a general reduction of working time (the 28 hours week) without compensation of wage losses. In change the firm promised not to dismiss workers. The agreement included a wide flexibilization of working hours. The Volkswagen agreement served as a pattern for general collective agreements in the Metal Sector which allow for working time reduction and flexibilization in change for job guarantees on the firm level.
d) A lot of other agreements have been negotiated that provide for the reduction of working time as an employment policy: early retirement schemes (eg. Metal and Public Sectors); part time work; extended work leaves (for education, family etc.-public sector). These forms try to meet different interests: those of the employers to reduce work costs, those of the unions to avoid dismissals, those of the workers to adapt working time to the social needs. Apart from the early retirement schemes, they mean not only a reduction or a temporary absence of remuneration, but less provision for future social security rights.
e) In the bodies of the Labour and Social Security administration Unions have pressed for active State's labour market policy, in particular for State subsidized jobs (ABM ) and training programs.
The International Economy
The Internationalization of the economies created a wide discussion on how to defend labour standards and collective bargaining. After all, unions are increasingly aware of the necessity and the usefulness of transnational cooperation. There are different levels: Global players have formed global works councils as a form of information exchange and influence on the central management. After the EU directive on European Works Councils came into force, works councils are experiencing this new form of cooperation now. In the North-South-Relation new forms of cooperation between unions and NGOs are emerging. There is still the problem, how to influence trade policies and treaties in order to protect labour standards.
Most important topics
I think that the most important challenges for German unions and collective bargaining are posed by a) unemployment and the erosion of the normal employment pattern, b) the erosion of the traditional system of industrywide collective bargaining , c) internationalization of the economies
a) It seems to be an illusion to hope for another period of full employment. Moreover, the societal changes - participation of women, socially differentiated needs of different groups - require mor heterogenous employment patterns that are not as standardized as the traditional 'Normal Employment Pattern'. Thus, on the one hand, new employment policies are necessary - and I think, new Social Pacts are one form to define them- ; new combinations between salaried work and other activities (education, family work etc) have to been facilitated. On the other hand, it is necessary to give a regulatory frame and social security to the 'atypical' forms of employment. A huge, completely unresolved problem will be the reform of the Social Security System in order not to put too heavy a burden on the younger generation and to stabilize the social perspectives of workers with 'Patchwork trajectories'. I think, this problem would be an important topic for the network.
b) With the increasing heterogeneity of firms and types of work it does not seem realistic to return to the traditional system of industry-wide standards setting. It is a strategic problem how to combine industry-wide bargaining with more flexible decentralized forms of bargaining without opening the doors for substandard race to the bottom and deepening social inequality.
c) International cooperation: Even more than in the European context with its highly institutionalized regulatory framework it is important for unions to find new paths for protecting and promoting labour standards (promoting public debate and political pressure on international regimes (like MAI)), developing and supporting unconventional campaigns -codes of conducts, consumers labels, forming new coalitions with NGOs etc)
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