Rethinking Workplace Regulation: Beyond the Standard Contract of Employment

7. Erosion, Exhaustion, or Renewal? New Forms of Collective Bargaining in Germany

115 Chapter 7 Erosion, Exhaustion, or Renewal? New Forms of Collective Bargaining in Germany thomas haipeter I ndustrial relations and collective bargaining in Germany are experiencing an upheaval. Traditionally, collective bargaining actors and collective bargaining itself have been driving forces in the development and definition of standard employment relationships characterized by well-paid, permanent, and full-time labor contracts. For more than a decade, a process of erosion of collective bargaining and the standard employment relationship has been observed (see, for example, Hassel 1998). Indeed, the signs of erosion or exhaustion are manifold—from the decline of collective bargaining coverage, the membership losses of employers’ associations and unions, and the decentralization of collective bargaining—to other developments such as the growth of a lowwage sector (Bosch and Kalina 2008), the weakening of labor standards in the course of privatization (Brandt and Schulten 2008), the rise of a nonunion sector (Artus 2008), and the increase in precarious labor contracts such as temporary work (Holst, Nachtwey, and Dörre 2010). The central question concerning the development of German industrial relations is not whether this diagnosis is correct. It is certainly correct . Rather, it is what the consequences are for the actors in collective bargaining and whether there are any opportunities for ameliorative action . The erosion hypothesis leaves little room for such action. From this perspective, a process of erosion is destroying old institutions without any possibility for the creation of new nonmarket institutions. In this scenario , a liberal or Anglo-Saxon model of weak unions, powerless employers ’ associations, dispersed collective bargaining on the plant level, 116 Rethinking Workplace Regulation and a growing nonunion sector is regarded as the most probable scenario for the future of German industrial relations. Wolfgang Streeck’s hypothesis of exhaustion (2010) points in a similar direction. In this view, institutional exhaustion of industrial relations is fueled by a process of liberalization that weakens the sanctioning power of nonprivate and nonmarket institutions on employers. This process does not necessarily lead to a deinstitutionalization of collective bargaining as suggested in the erosion scenario, but to a reinstitutionalization characterized by the replacement of compulsory institutions by institutions and forms of cooperation formed voluntarily by market actors. The most prominent example Streeck gives us is the development of local alliances for work between management and works councils. These alliances , on the one hand, can go along with deviations from the norms of collective bargaining, fostering internal erosion of collective bargaining norms. On the other hand, they also form a new mode of coordination between capital and labor at the plant level, building on the exchange of job protection for concessions. However, the exhaustion argument, like the erosion one, takes for granted a prolongation of the weakening of collective bargaining and the collective bargaining actors. The relationship between collective bargaining and collective bargaining actors is described as mutual destabilization. Exhausted actors have neither the power to reverse these trends nor the conceptual means to invent alternatives . Regarded this way, the new central actors of industrial relations will be corporations, because liberalization, brought about by the internationalization of production, the financialization of corporate governance , and the privatization of former public services, provide them with more leeway for action and reduce the maneuvering room for workers and their collective bargaining agents. In this chapter, I argue that both explanatory approaches—erosion and exhaustion—have prematurely sent unions, and possibly employers ’ associations, into early retirement. The future of collective bargaining in Germany, I contend, cannot be adequately described as one stemming from exhaustion. Although this is an interesting heuristic device to describe institutional developments, it ignores the capabilities of actors to recognize problems and to react to them when they are still powerful enough to make significant contributions to the development of institutions . From my point of view, this is precisely what is observable in the German system or, more specifically, in some sectors of the current German system of industrial relations. Erosion and exhaustion still continue, but there are also signs of new developments. Collective bargaining is characterized not, as Streeck argues, by several independent yet unidirectional processes of liberalization, but instead by several processes that are tightly connected and nevertheless go into different, even opposite, directions. These new developments do not turn back time. In this re- Erosion, Exhaustion, or Renewal? 117 spect, the argument of the resiliency of the German system of industrial relations, made occasionally in the 1990s, no longer...