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Why does Germany abstain from statutory bargaining extensions? Explaining the exceptional German erosion of collective wage bargaining

Author

Listed:
  • Wolfgang Günther

    (University of Leipzig, Germany)

  • Martin Höpner

    (Max Planck Institute for the Study of Societies, Germany)

Abstract

Against the European trend, German statutory collective bargaining extensions (SBEs) have decreased in the last two decades, contributing to the exceptional erosion of German wage-bargaining coverage. This article distinguishes between two liberalization dynamics: an intrasectoral dynamic that started with the introduction of employers’ association memberships outside the scope of collective agreements, and an intersectoral dynamic. The latter is the result of an abnormal German institutional feature, the veto power of the employers’ umbrella association in the committees that have to approve SBE applications. Activation of this veto enabled employers to promote collective bargaining erosion in sectors other than their own, in order to contain cost pressures. This intersectoral liberalization dynamic has been part of Germany’s transition into an asymmetrically export-driven growth regime and could be stopped by means of political reforms.

Suggested Citation

  • Wolfgang Günther & Martin Höpner, 2023. "Why does Germany abstain from statutory bargaining extensions? Explaining the exceptional German erosion of collective wage bargaining," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 44(1), pages 88-108, February.
    • Handle: RePEc:sae:ecoind:v:44:y:2023:i:1:p:88-108
    DOI: 10.1177/0143831X211065783
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    References listed on IDEAS

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