Diversity in Employment Patterns in North-West Europe : A Regional and Sectoral Approach
The decline in Germany's capacity to provide employment for its population has become one of the most discussed economic questions of the turn of the twentieth and twenty-fi rst centuries. It is a change that has occurred despite the economy's continuing strong performance on the most obvious criterion of national competitiveness: capacity to sell goods abroad. Particularly puzzling from some perspectives is that the two parts of Europe that out-perform Germany on employment – the United Kingdom and the Nordic Countries – are often considered in the literature on capitalist diversity to differ from Germany in opposite ways. For example, in the dichotomized world of Hall and Soskice (2001) the UK is a paradigm case of a liberal market economy, while the Nordic countries are, like Germany, coordinated market economies. Other observers claim that the Nordics and the UK both have low levels of labor-market regulation, but this only works if certain forms of government regulation are considered: the Nordic countries have more powerful trade unions and legislation governing the work environment than either Germany or the UK. That in post-industrial economies both so-called 'liberal' and 'social demo-cratic' welfare states might have a superior capacity to generate employment than so-called 'corporatist' ones was anticipated some years ago by Esping-An-dersen (1999). In his scheme the UK, the Nordics, and Germany were clear representatives of these respective types. In free-market economies, he argued, there was a large gap between wealthy and poor populations, enabling the former to employ the latter at low wages and with low or nonexistent non-wage costs in low-productivity service jobs. Also, generous welfare states produced a large number of jobs in public services, many of which also existed at low-skilled levels. These two contrasting kinds of economy both developed a capacity to provide low-productivity jobs in services to replace those that had existed in Fordist manufacturing. Ebbinghaus (2000) reached a similar conclusion about these three country types following an examination of a different policy area: early retirement.
Did the German Model Survive the Labor Market Reforms?
This paper discusses the specific features of the German model as a specific variety of capitalism that is distinct from the Anglo-Saxon model because it builds more on social security and social partnership. It argues that the German model has experienced increasing pressure due to growth in systemic unemployment since the mid-1970s. The situation worsened as a result of the financial distress experienced after re-unification. Therefore, although painful for some groups of workers, the labor market reforms implemented from 2003 to 2005 were necessary to keep the German model alive. I argue that a certain erosion of the German model resulting from less collective bargaining coverage, labor market segmentation and higher wage inequality has falsely been attributed to the reforms. Rather, these phenomena are caused by long-run trends that were already occurring in the 1990s or even earlier.The German economy successfully passed the stress test of the Great Recession and is exhibiting ongoing employment growth. Basic features of the German model such as long tenures for qualified prime-age workers or the dual training system remain essentially intact. Hence, the German model is not dead, but vitally alive. However, some prudent counter-measures need to be implemented to fight against creeping erosion from segmentation and inequality. These should be taken with a sense of proportion in order to not jeopardize the great employment-related successes of the reform.ZusammenfassungDer Aufsatz diskutiert entlang verschiedener Dimensionen die Kennzeichen des deutschen Modells als einer besonderen Spielart des Kapitalismus. Diese unterscheidet sich vom angelsächsischen Modell, da sie stärker auf soziale Absicherung und Sozialpartnerschaft setzt. Er argumentiert, dass das deutsche Modell aufgrund der seit Mitte der 1970er Jahre schubartig angewachsenen Sockelarbeitslosigkeit zunehmend unter Druck geraten ist. Die Situation verschlechterte sich noch aufgrund der finanziellen Belastungen durch die deutsche Wiedervereinigung. Obgleich schmerzhaft für bestimmte Arbeitnehmergruppen, waren die in den Jahren 2003 bis 2005 durchgeführten Arbeitsmarktreformen letztlich unvermeidlich, um einen Kollaps des Systems zu verhindern. Gewisse Erosionserscheinungen am deutschen Modell wie die rückläufige Tarifabdeckung, die zunehmende Segmentation des Arbeitsmarktes und die höhere Lohnungleichheit werden fälschlicherweise den Reformen zugeschrieben. Die empirischen Fakten belegen, dass diesen Phänomenen längerfristige Trends zugrunde liegen, die schon vor den Reformen in den 1990er Jahren oder sogar früher einsetzten.Nach den Reformen überstand die deutsche Wirtschaft den Stresstest der Großen Rezession erfolgreich und zeigte nachhaltiges Beschäftigungswachstum. Wesentliche Bestandteile des deutschen Modells wie die langen Betriebszugehörigkeiten von qualifizierten Facharbeiter/innen, das duale Ausbildungssystem, die starke Exportorientierung sowie eine solide finanzierte Sozialversicherung sind im Wesentlichen erhalten geblieben. Deswegen ist das deutsche Modell keineswegs abgewickelt, sondern im Kern weiterhin sehr lebendig. Eine gewisse Bedrohung ergibt sich aus den schleichenden Erosionserscheinungen durch wachsende Segmentation und Ungleichheit. Hierauf sollte mit ausgewogenen Gegenmaßnahmen reagiert werden, die jedoch nicht die Beschäftigungserfolge des bisherigen Reformprozesses wieder in Frage stellen sollten.
Order and Conflict in Contemporary Capitalism
(1986). Order and Conflict in Contemporary Capitalism. Journal of Economic Issues: Vol. 20, No. 1, pp. 258-260.