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

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  • 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
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    References listed on IDEAS

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    Cited by:

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    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.
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    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. Jill Rubery & Damian Grimshaw & Philippe Méhaut & Claudia Weinkopf, 2024. "Dualisation and part-time work in France, Germany and the UK: Accounting for within and between country differences in precarious work," European Journal of Industrial Relations, , vol. 30(4), pages 363-381, December.
    9. 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.
    10. Marx, Ive & Haapanala, Henri & Marchal, Sarah, 2024. "Is Poverty Reduction in Europe Doomed? Conjectures, Facts and a Cautiously Optimistic Conclusion," IZA Discussion Papers 16967, IZA Network @ LISER.
    11. 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.
    12. Gerhard Bosch & Michaela Evans‐Borchers, 2026. "Revaluation of Essential Work: The Example of Elderly Care in Germany," Industrial Relations Journal, Wiley Blackwell, vol. 57(1), pages 47-58, January.
    13. 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.
    14. 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.
    15. 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.
    16. 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.
    17. 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.
    18. 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.
    19. Michal Kozák & Georg Picot, 2025. "The politics of the minimum wage: Explaining introduction and levels," British Journal of Industrial Relations, London School of Economics, vol. 63(1), pages 161-179, March.
    20. 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.
    21. Mark Benton, 2021. "Public justifications for the US minimum wage," Industrial Relations Journal, Wiley Blackwell, vol. 52(4), pages 331-347, July.
    22. 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.
    23. 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.
    24. 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.
    25. Haapanala, Henri & Marx, Ive & Parolin, Zachary, 2022. "Decent Wage Floors in Europe: Does the Minimum Wage Directive Get It Right?," IZA Discussion Papers 15660, IZA Network @ LISER.

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