Low-Wage Work in Germany

6. Low-Paid but Committed to the Industry: Salespeople in the Retail Sector

CHAPTER 6 Low-Paid but Committed to the Industry: Salespeople in the Retail Sector Dorothea Voss-Dahm Reports on the Wal-Mart system do not sound at all unfamiliar to German ears. In Germany, as in the United States, large retail companies are growing primarily by squeezing out smaller retailers, and that growth is also being achieved by means of an approach to competition based on aggressive price cutting (Lichtenstein 2006). In 2004, 40 percent of sales in the German food retail trade were captured by discounters—that is, companies that offer mass-consumption goods at permanently low prices and on a self-service basis. Thus, the discount principle in its pure form is also known and in widespread use in Germany. In contrast to Wal-Mart in the United States, however, the discounters in Germany are not the largest German food retail chains. Rather, the German retail sector has many faces, not least because the two largest German retail companies, with their cooperative tradition and high share of self-employed traders, are not managed centrally but have instead introduced an element of decentralization into the world of retailing. Despite differences in organizational forms, however, German retail companies are also exploiting the advantages of integration into global value chains and modern information and communications technologies that allow real-time monitoring and control of goods management systems and stores. The German and American retail sectors also have something in common when it comes to employment. In both countries, low wages are considerably more prevalent in the retail sector than in the economy as a whole (Holgate 2006). There are significant differences , however, in the employment structure. More than half of retail workers in Germany are part-timers, many of them employed in marginal part-time jobs called “mini-jobs,” whereas in the United States 253 the share of full-timers is much higher. There are also considerable differences in the level of institutional support for employment relationships . More than three-quarters of all employees in German retailing have completed a two- or three-year vocational training course, whereas American retail workers have little formal training. Another difference is that, in Germany, the basic working and employment conditions, such as pay and working time, are regulated by industrywide collective agreements. Moreover, employees in Germany enjoy a higher level of social protection than their counterparts in the United States. In Germany all part-time and full-time employees in jobs subject to social insurance contributions are covered by the social security system. In the United States, in contrast, only one-third of retail trade workers have medical insurance and receive employer-sponsored retirement benefits (Carré, Holgate, and Tilly 2006). Institutions introduce certain limiting factors into the employment system in the retail sector, and firms and employees use these constraints to guide them in shaping employment relationships. But do these institutions exert a substantial influence on job quality throughout the retail trade? For example, how do low wages in German retailing fit in with occupational labor markets? Is sound vocational training not an entrance ticket to jobs with good working and employment conditions? And how can it be that the structure and level of remuneration are regulated at the industry level by the social partners and yet considerable income differences exist? These questions can also be put in a different way: does the situation in the German retail trade suggest that the legal anchoring of labor market institutions is not sufficient and that those institutions must also wield considerable power and influence in order to create good working and employment conditions? THE SAMPLE AND THE METHODOLOGY Twelve case studies were carried out in eight retail companies. Of these eight companies, four are food retailers and four electrical goods retailers. All the companies are leading companies in their sector in terms of market power and should be regarded as full-range retailers , since the product ranges they carry are broad and deep. Thus, our sample does not include retail formats like discounters and specialist retailers operating small outlets. The target occupations studied were sales activities on the selling floor and at checkouts. In the 254 Low-Wage Work in Germany course of the case studies, we conducted guided individual interviews with sixteen managers at the head-office or store level, four works councillors, and fifty employees. In the employee interviews, we emphasized questions about career biographies, job profiles, and working conditions. At the...