Open AccessWhy does Germany abstain from statutory bargaining extensions? Explaining the exceptional German erosion of collective wage bargaining
Author(s) -
Wolfgang Günther,
Martin Höpner
Publication year - 2022
Publication title -
economic and industrial democracy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.894
H-Index - 40
eISSN - 1461-7099
pISSN - 0143-831X
DOI - 10.1177/0143831x211065783
Subject(s) - veto , german , collective bargaining , bargaining power , statutory law , wage , scope (computer science) , liberalization , economics , revenue , labour economics , market economy , politics , economic system , political economy , political science , law , microeconomics , finance , programming language , archaeology , computer science , history
Against the European trend, German statutory collective bargaining extensions (SBEs) have decreased in the last two decades, contributing to the exceptional erosion of German wage-bargaining coverage. This article distinguishes between two liberalization dynamics: an intrasectoral dynamic that started with the introduction of employers’ association memberships outside the scope of collective agreements, and an intersectoral dynamic. The latter is the result of an abnormal German institutional feature, the veto power of the employers’ umbrella association in the committees that have to approve SBE applications. Activation of this veto enabled employers to promote collective bargaining erosion in sectors other than their own, in order to contain cost pressures. This intersectoral liberalization dynamic has been part of Germany’s transition into an asymmetrically export-driven growth regime and could be stopped by means of political reforms.