The (Parlous) State of German Unions

30 Pages Posted: 13 Mar 2006

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

Claus Schnabel

University of Erlangen-Nuremberg; IZA Institute of Labor Economics

Joachim Wagner

University of Lueneburg - Institute of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; IZA Institute of Labor Economics

Date Written: March 2006

Abstract

This paper traces the profound decline in German unionism over the course of the last three decades. Today just one in five workers is a union member, and it is now moot whether this degree of penetration is consistent with a corporatist model built on encompassing unions. The decline in union membership and density is attributable to external forces that have confronted unions in many countries (such as globalization and compositional changes in the workforce) and to some specifically German considerations (such as the transition process in post-communist Eastern Germany) and sustained intervals of classic insider behavior on the part of German unions. The "correctives" have included mergers between unions, decentralization, and wages that are more responsive to unemployment. At issue is the success of these innovations. For instance, the trend toward decentralization in collective bargaining hinges in part on the health of that other pillar of the dual system of industrial relations, the works council. But works council coverage has also declined, leading some observers to equate decentralization with deregulation. While this conclusion is likely too radical, German unions are at the cross roads. It is argued here that if they fail to define what they stand for, are unable to increase their presence at the workplace, and continue to lack convincing strategies to deal with contemporary economic and political trends working against them, then their decline may become a rout.

Keywords: union membership, union density, union mergers, collective bargaining, works

JEL Classification: J51

Suggested Citation

Addison, John T. and Schnabel, Claus and Wagner, Joachim, The (Parlous) State of German Unions (March 2006). IZA Discussion Paper No. 2000. Available at SSRN: https://ssrn.com/abstract=890275

John T. Addison (Contact Author)

University of South Carolina - Moore School of Business - Department of Economics ( email )

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HOME PAGE: http://mooreschool.sc.edu/moore/economics/profiles/addison.htm

IZA Institute of Labor Economics

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Claus Schnabel

University of Erlangen-Nuremberg ( email )

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IZA Institute of Labor Economics

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Joachim Wagner

University of Lueneburg - Institute of Economics ( email )

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HOME PAGE: http://www.uni-lueneburg.de/wifo

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

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Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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