IDEAS home Printed from https://ideas.repec.org/a/bla/indrel/v49y2018i1p19-33.html
   My bibliography  Save this article

The making of the German minimum wage: a case study of institutional change

Author

Listed:
  • Gerhard Bosch

Abstract

In the more recent dualistic theories, Germany is cited as an example of a less solidaristic equilibrium, in which ‘producer coalitions’ between core workforces supposedly unaffected by deregulation and their employers prevented the introduction of a minimum wage. The present article shows that such an equilibrium never existed. Core workforces are being threatened by the outsourcing of jobs to the low†wage sector. This threat created the breeding ground for a joint campaign by manufacturing and service unions for a minimum wage, which made it possible to amalgamate the unions' considerable resources at company level, their strength being derived from the German system of codetermination. Under pressure from the manufacturing unions in particular, the arrangements for the minimum wage follow, as far as possible, the traditions of free collective bargaining. As a result, the social partners in Germany have a considerably stronger influence on the minimum wage than those in the UK.

Suggested Citation

  • Gerhard Bosch, 2018. "The making of the German minimum wage: a case study of institutional change," Industrial Relations Journal, Wiley Blackwell, vol. 49(1), pages 19-33, January.
    • Handle: RePEc:bla:indrel:v:49:y:2018:i:1:p:19-33
    DOI: 10.1111/irj.12200
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/irj.12200
    Download Restriction: no
    File URL: https://libkey.io/10.1111/irj.12200?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Deborah Goldschmidt & Johannes F. Schmieder, 2017. "The Rise of Domestic Outsourcing and the Evolution of the German Wage Structure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(3), pages 1165-1217.
    2. Bruno Palier & Kathleen Thelen, 2010. "Institutionalizing Dualism: Complementarities and Change in France and Germany," Politics & Society, , vol. 38(1), pages 119-148, March.
    3. Gerhard BOSCH, 2015. "Shrinking collective bargaining coverage, increasing income inequality: A comparison of five EU countries," International Labour Review, International Labour Organization, vol. 154(1), pages 57-66, March.
    4. Anke Hassel, 2014. "The Paradox of Liberalization — Understanding Dualism and the Recovery of the German Political Economy," British Journal of Industrial Relations, London School of Economics, vol. 52(1), pages 57-81, March.
    5. Joachim Möller, 2012. "Minimum wages in German industries—what does the evidence tell us so far? [Branchenspezifische Mindestlöhne in Deutschland – Was sagt uns die empirische Forschung?]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(3), pages 187-199, December.
    6. Crouch, Colin & Farrell, Henry, 2002. "Breaking the path of institutional development? Alternatives to the new determinism," MPIfG Discussion Paper 02/5, Max Planck Institute for the Study of Societies.
    7. Christian Lévesque & Gregor Murray, 2010. "Understanding union power: resources and capabilities for renewing union capacity," Transfer: European Review of Labour and Research, , vol. 16(3), pages 333-350, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grégory Jemine, 2023. "It takes two to tango: Reconceptualizing union power and union effectiveness in a relational perspective," Industrial Relations Journal, Wiley Blackwell, vol. 54(6), pages 445-470, November.
    2. Friedrich Martin, 2020. "Using Occupations to Evaluate the Employment Effects of the German Minimum Wage," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 269-294, April.
    3. Valerie J. D'Erman & Daniel F. Schulz & Amy Verdun & Dennis Zagermann, 2022. "The European Semester in the North and in the South: Domestic Politics and the Salience of EU‐Induced Wage Reform in Different Growth Models," Journal of Common Market Studies, Wiley Blackwell, vol. 60(1), pages 21-39, January.
    4. Anna Mori, 2024. "Explaining varieties of social solidarity in supply chains: Actors, institutions and market risks distribution in outsourced public services," British Journal of Industrial Relations, London School of Economics, vol. 62(2), pages 449-479, June.
    5. Glenn Morgan & Valeria Pulignano, 2020. "Solidarity at Work: Concepts, Levels and Challenges," Work, Employment & Society, British Sociological Association, vol. 34(1), pages 18-34, February.
    6. Dütsch Matthias & Himmelreicher Ralf, 2020. "Characteristics Contributing to Low- and Minimum-Wage Labour in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 161-200, April.
    7. Simon Ress & Florian Spohr, 2022. "Was it worth it? The impact of the German minimum wage on union membership of employees," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(4), pages 1699-1723, November.
    8. Ive Marx; & Henri Haapanala; & Sarah Marchal;, 2024. "Is poverty reduction in Europe doomed? Conjectures, facts and a cautiously optimistic conclusion," Working Papers 2403, Herman Deleeck Centre for Social Policy, University of Antwerp.
    9. Marx, Ive & Haapanala, Henri & Marchal, Sarah, 2024. "Is Poverty Reduction in Europe Doomed? Conjectures, Facts and a Cautiously Optimistic Conclusion," IZA Discussion Papers 16967, Institute of Labor Economics (IZA).
    10. Bernardo Fanfani & Claudio Lucifora & Daria Vigani, 2024. "Employer associations in Italy: Trends and economic outcomes," British Journal of Industrial Relations, London School of Economics, vol. 62(2), pages 206-232, June.
    11. Glenn Morgan & Marco Hauptmeier, 2021. "The Social Organization of Ideas in Employment Relations," ILR Review, Cornell University, ILR School, vol. 74(3), pages 773-797, May.
    12. Dütsch Matthias & Himmelreicher Ralf, 2020. "Characteristics Contributing to Low- and Minimum-Wage Labour in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 161-200, April.
    13. Sarah Marchal & Linus Sióland, 2019. "A safety net that holds? Tracking minimum income protection adequacy for the elderly, the working and the non-working of active age," Working Papers 1909, Herman Deleeck Centre for Social Policy, University of Antwerp.
    14. Martin Behrens & Andreas Pekarek, 2021. "Divided We Stand? Coalition Dynamics in the German Union Movement," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 503-531, June.
    15. Weisstanner, David, 2019. "Insiders under pressure: Flexible employment and wage inequality," INET Oxford Working Papers 2019-06, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    16. Radu Stefan Patru, 2021. "Reflections on actual situation of collective bargaining for the public servants and public services in Romania and in Europe. A theoretical and practical approach," Juridical Tribune - Review of Comparative and International Law, Bucharest Academy of Economic Studies, vol. 11(2), pages 251-261, June.
    17. Mathew Johnson & Aristea Koukiadaki & Damian Grimshaw, 2019. "The Living Wage in the UK: testing the limits of soft regulation?," Transfer: European Review of Labour and Research, , vol. 25(3), pages 319-333, August.
    18. Mark Benton, 2021. "Public justifications for the US minimum wage," Industrial Relations Journal, Wiley Blackwell, vol. 52(4), pages 331-347, July.
    19. Friedrich Martin, 2020. "Using Occupations to Evaluate the Employment Effects of the German Minimum Wage," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 269-294, April.
    20. Torben Krings, 2021. "‘Good’ Bad Jobs? The Evolution of Migrant Low-Wage Employment in Germany (1985–2015)," Work, Employment & Society, British Sociological Association, vol. 35(3), pages 527-544, June.
    21. Dütsch Matthias & Altun Orkun & Grundmann Luisa & Himmelreicher Ralf, 2023. "What Does the German Minimum Wage Do? The Impact of the Introduction of the Statutory Minimum Wage on the Composition of Low- and Minimum-Wage Labour," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 243(3-4), pages 355-396, June.
    22. Haapanala, Henri & Marx, Ive & Parolin, Zachary, 2022. "Decent Wage Floors in Europe: Does the Minimum Wage Directive Get It Right?," IZA Discussion Papers 15660, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ochsenfeld, Fabian, 2018. "The Relational Nature of Employment Dualization: Evidence from Subcontracting Establishments," SocArXiv ta4r6, Center for Open Science.
    2. Bjarke Refslund & Jens Arnholtz, 2022. "Power resource theory revisited: The perils and promises for understanding contemporary labour politics," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(4), pages 1958-1979, November.
    3. Pedro Mendonça, 2020. "Trade union responses to precarious employment: the role of power resources in defending precarious flight attendants at Ryanair," Transfer: European Review of Labour and Research, , vol. 26(4), pages 431-445, November.
    4. Jens Arnholtz, 2023. "The embedded flexibility of Nordic labor market models under pressure from EU‐induced dualization—The case of posted work in Denmark and Sweden," Regulation & Governance, John Wiley & Sons, vol. 17(2), pages 372-388, April.
    5. Sean O'Brady, 2021. "Fighting precarious work with institutional power: Union inclusion and its limits across spheres of action," British Journal of Industrial Relations, London School of Economics, vol. 59(4), pages 1084-1107, December.
    6. Gerhard Bosch, 2023. "Employment policy for a just transition – the example of Germany," Transfer: European Review of Labour and Research, , vol. 29(3), pages 405-421, August.
    7. Torben Krings, 2021. "‘Good’ Bad Jobs? The Evolution of Migrant Low-Wage Employment in Germany (1985–2015)," Work, Employment & Society, British Sociological Association, vol. 35(3), pages 527-544, June.
    8. Baumann Arne, 2025. "What Explains Differences in Minimum Wage Growth Between EU Member States?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 245(1-2), pages 7-44.
    9. David Marsden, 2015. "The future of the German industrial relations model [Die Zukunft des deutschen Modells der Arbeitsbeziehungen]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 48(2), pages 169-187, August.
    10. Weisstanner, David, 2019. "Insiders under pressure: Flexible employment and wage inequality," INET Oxford Working Papers 2019-06, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    11. Eichhorst, Werner & Scalise, Gemma, 2024. "Revisiting Dualism? The Governance of the Low Pay-Low Skill Labour Market in Four European Countries," IZA Discussion Papers 17378, Institute of Labor Economics (IZA).
    12. Arthur Corazza, 2020. "Power, interest and insecurity: A comparative analysis of workplace dualization and inclusion in Europe," LEQS – LSE 'Europe in Question' Discussion Paper Series 153, European Institute, LSE.
    13. Rebecca J Oliver & Andrew L Morelock, 2021. "Insider and outsider support for unions across advanced industrial democracies: Paradoxes of solidarity," European Journal of Industrial Relations, , vol. 27(2), pages 167-183, June.
    14. Guglielmo Meardi & Melanie Simms & Duncan Adam, 2021. "Trade unions and precariat in Europe: Representative claims," European Journal of Industrial Relations, , vol. 27(1), pages 41-58, March.
    15. Sonja Avlijas & Anke Hassel & Bruno Palier, 2021. "Growth Strategies and Welfare Reforms in Europe," Post-Print hal-03380958, HAL.
    16. Braun, Benjamin & Deeg, Richard, 2019. "Strong firms, weak banks: The financial consequences of Germany's export-led growth model," MPIfG Discussion Paper 19/5, Max Planck Institute for the Study of Societies.
    17. Martin Behrens & Andreas Pekarek, 2021. "Divided We Stand? Coalition Dynamics in the German Union Movement," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 503-531, June.
    18. Werner Eichhorst & Verena Tobsch, 2015. "Not so standard anymore? Employment duality in Germany [Vom Normalarbeitsverhältnis zu atypischen Verträgen? Die Dualisierung des deutschen Arbeitsmarktes]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 48(2), pages 81-95, August.
    19. Martin Behrens & Andreas Pekarek, 2023. "Delivering the goods? German industrial relations institutions during the COVID‐19 crisis," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 62(2), pages 126-144, April.
    20. Baptiste Françon, 2021. "Salaire minimum en Allemagne et segmentation de l’emploi," Working Papers halshs-03217241, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:indrel:v:49:y:2018:i:1:p:19-33. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0019-8692 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.