Why does Germany abstain from statutory bargaining extensions? Explaining the exceptional German erosion of collective wage bargaining

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.

Northern European collective wage bargaining in the face of major political-economic challenges: common and differing trajectories

We address developments in collective wage bargaining arrangements in northern Europe in the light of two major political-economic challenges: EU eastern enlargement and the financial and economic crisis which broke in 2008. Through the lens of debates on convergence and divergence, we examine three dimensions of collective wage bargaining: coordination across sectors; articulation between different levels; and regulation of wage floors. We draw on findings from five countries and four sectors. Our analysis undermines the proposition that developments exhibit a common liberalising trajectory. It points to the differential impact of the two major political-economic challenges as between sectors, highlights similar and different policy responses by actors within a sector across countries, reveals differing consequences for governance of collective wage bargaining across sectors and countries, and finds no uniform trend in wage inequality outcomes. L’examen des accords issus de la négociation collective sur les salaires en Europe du Nord est replacé dans le contexte de deux défis politico-économiques majeurs: l’élargissement de l’UE à l’Est et la crise financière et économique qui a éclaté en 2008. La question de l’existence d’une convergence ou d’une divergence est abordée selon trois dimensions de la négociation collective des salaires: la coordination entre les secteurs, l’articulation entre les différents niveaux et la réglementation des planchers salariaux. Nous nous appuyons sur les résultats obtenus dans cinq pays et quatre secteurs. Notre analyse remet en question l’idée selon laquelle les évolutions présentent une trajectoire commune de libéralisation. Elle souligne la différence d’impact, entre les secteurs, des deux principaux défis politico-économiques évoqués et met en lumière les similarités et les différences dans les réponses politiques apportées par les acteurs d’un secteur dans les différents pays. L’analyse montre également les conséquences différentes pour la gouvernance des négociations collectives salariales entre les secteurs et les pays, et ne relève aucune tendance uniforme dans les résultats en matière d’inégalité salariale. Wir befassen uns im vorliegenden Artikel mit der Ausgestaltung von Tarifverhandlungen in Nordeuropa vor dem Hintergrund zweier wichtiger politisch-wirtschaftlicher Herausforderungen: der Osterweiterung der EU und der Finanz- und Wirtschaftskrise, die 2008 ihren Anfang nahm. Anhand der Debatten über Konvergenz und Divergenz untersuchen wir drei Dimensionen von Tarifverhandlungen: branchenübergreifende Koordinierung, Verständigung zwischen den unterschiedlichen Ebenen und Mindestlohnregelungen. Zu diesem Zweck haben wir Ergebnisse aus fünf Ländern und vier Sektoren ausgewertet. Unsere Analyse widerlegt die Annahme, dass alle Entwicklungen einem gemeinsamen Liberalisierungstrend folgen. Sie zeichnet die unterschiedlichen Auswirkungen der beiden großen politisch-wirtschaftlichen Herausforderungen in den einzelnen Sektoren nach; und beschreibt vergleichbare und unterschiedliche politische Antworten der Akteure eines Sektors in verschiedenen Ländern mit unterschiedlichen Folgen für die Gestaltung von Tarifverhandlungen in Sektoren und Ländern. Ein einheitlicher Trend bei der Entwicklung von Lohnungleichheiten ist nicht festzustellen.

Variable Pay Systems and/or Collective Wage Bargaining? Complements or Substitutes?

Whether collective wage bargaining impedes the implementation of variable pay systems is uncertain. The authors argue that much of this uncertainty is attributable to the fact that research neglects differences in the institutional structure of bargaining. Using representative company-level data for all member states of the European Union, the authors investigate the incidence of variable pay systems in general as well as pay types that include payment-by-results, performance-related pay, and team-related pay under various bargaining arrangements. Findings show that the institutional structure of collective bargaining matters: Variable pay systems thrive under company and multilevel collective bargaining, whereas their implementation is limited under national-level collective wage bargaining.

Differences in wage-determination systems between regular and non-regular employment in a Kaleckian model

In this study, we build a Kaleckian model incorporating institutional differences between the wage determination of regular employment and that of non-regular employment. In our model, three types of wage-bargaining regimes are defined based on how regular workers’ collective wage bargaining affects the real wage rate of non-regular workers. We investigate the stability conditions of the dynamical system under each combination of demand regimes and wage-bargaining regimes. We also conduct comparative static analysis and show that the effects of changes in the parameters are diverse depending on combinations of demand regimes and wage-bargaining regimes.

Experiences with Occupational Pensions in Denmark

Summary: This paper focuses on the development of the funded, occupational pension (OP) system in Denmark. Launched in 1987, as a grand agreement between social partners backed by the government, and as part of the collective wage bargaining process, the Danish OP system differs from the set-up in most other countries, where OP schemes typically have been introduced as part of the legislative process. The OP schemes, being a major component of the overall Danish pension system, have attracted a lot of international attention in recent years and play a key role behind the system’s success with respect to achieving satisfactory coverage, providing high replacement rates and not least, for keeping fiscal policy on a sustainable path. Finally, the paper discusses a number of future challenges, mainly related to the interaction between private and public pensions in a welfare state.

The manufacturing sector: Still an anchor for pattern bargaining within and across countries?

This article investigates the development of collective wage bargaining systems in manufacturing in five countries: Denmark, Finland, Germany, Norway and Sweden. We illustrate the responses of collective actors to two key challenges: first, increased cross-country competition between Northern European companies operating within the same high-value/high-cost segment of the market; second, the competitive pressures resulting from increased east-north integration. Our analytical framework sets out different forms and outcomes of institutional change, with a focus on how the responses of collective actors to these two challenges shaped the development of wage bargaining systems.

Collective wage bargaining under strain in northern European construction: Resisting institutional drift?

Internationalization, trade union decline, enforcement problems and rising self-employment all strain the effectiveness of collective wage bargaining arrangements in northern European construction. We examine Denmark, Germany, the Netherlands, Norway and the UK, and show that these strains have pushed trade unions to seek assistance from the state to stabilize wage regulation, but with results that vary according to employer strategies and the power balances between the actors. While Denmark and the UK have barely introduced any state support, Norway has followed the Netherlands and Germany in introducing legal mechanisms for extension of collectively agreed minimum wage terms. The country studies suggest that state assistance alleviates some of the strain, but does not reverse the trends, and the comparison indicates that both institutional innovation and reorganization may be required if wage bargaining is not to drift into different functions.