T1-01: Corporatism and models of industrial relations

Two worlds but one vision of the social market economy?

Timo Weishaupt, University of Göttingen, nstitute of Sociology

» Full paper: ilera-2019-paper-260-Weishaupt.pdf

In the midst of the Great Recession that caused a massive economic downturn throughout the advanced capitalist democracies, Germany transformed its global image from Europe’s sick man to miracle performer. The literature has well documented that the reduction of working time, especially among manufacturing firms, was the key explanation for the German Sonderweg.

In this paper, three questions are being asked. First, what role did the social partners play in German firms’ choice to hoard labour, given wide-spread reluctance amongst management and creditors? Second, what, if any, effects did the crisis management have on neo-corporatist arrangements both at associational and political level? And third, how do the experiences in the manufacturing sector contrast with those in the service sector? With reference to the Varieties of Capitalism approach, the paper argues that well-functioning, neo-corporatist communication channels within the Federal Employment Agency, the proactive role of employer associations at federal and regional level, and the ‘watch dog’ role of firm-level metal labour unions were crucial in implementing the labour hoarding strategy on a nationwide scale. Given the political pragmatism of the Chancellor and the positive experience with crisis management, the neo-corporatist exchanges subsequently led to an institutionalization of new multi-partite platforms and working groups, a political return to the Social Market Economy paradigm, as well as a stabilization of, if not increase in, the membership base in employment associations and IG Metall. While the manufacturing sector re-emerged stronger from the crisis, the experiences in the service sector are bleaker: membership has continued to decline, trust in collectivism has faded, and open conflict and strife have been prevalent in many regions.

Maarten Keune, University of Amsterdam
Paul de Beer, University of Amsterdam

The poldermodel has long been considered a proper way to create societal support for common policies and to minimize conflict in society. In the 1990s it was also heralded for its contribution to a successful economy, characterized by a balance between economic and social outcomes (Visser and Hemerijck 1997).

Today we see that we still have the polder institutions in place. The Socioeconomic Council and the Labour Foundation are active and collective agreements continue to cover some 80% of employees. At the same time, in line with Streeck and Thelen's (2005) work on gradual institutional change, slowly but surely changes have taken place in the actual functioning of these institutions and the outcomes they produce. The power balance between employers and workers has shifted in favour of the former, strengthening their position in collective bargaining and increasing their discretion over all aspects of work and the labour market (Baccaro and Howell 2017). Employers are less and less willing to not only pursue their own interests but also take those of the other side and of society at large into account, and to reach compromises. Collective bargaining has become more conflictive and difficult and moreand more collective agreements are concluded without the largest trade union. Also, the influence of the Socioeconomic Council and the Labour Foundation on government socioeconomic policies has been declining while these policies allign more with the interests of employers than of workers and their unions.

These changes in power and the functioning of institutions have resulted in, among others, long-term wage moderation and a decline of the share of income for workers; a gradual demise of the permanent contract and increase flexibility and insecurity in the labour market; and the growing insecurity of occupational pensions. Workers more and more bear the risks of the economy and the labour markets to the favour of employers and shareholders.

In this paper we discuss these processes and their causes in detail and argue that in the long run, they threaten to erode the foundations of the poldermodel as well as the relative equality of Dutch society.

Mikkel Mailand, FAOS, University of Copenhagen

Studies of the role and involvement of social partners in welfare state and labour market reforms covering the period from the outset of the Great Recession have emphasized the exclusion of the social partners - especially of the trade unions - from policy making. Hereby, the studies paint a picture of decline in corporatism as a governance mode. The present paper acknowledge this general picture, but wants to nuance it by focusing on ‘corporatist survivors’, i.e. countries were corporatism during and after the Great Recession has remained important for socio-economic governance. The paper will do to illuminate how and why corporatism can survived under difficult circumstances. Moreover, while the corporatist literature for decades mostly has focuses on the grand ‘social pacts’, the present paper will in addition to these include corporatist arrangement on single issues/ in single policy area, in order to provide a more encompassing picture of corporatism. The areas of unemployment insurance, active labour market policy and further training will be in focus. Finally, to test continued relevance of corporatism the paper will analyse the extent to which new issues – such as the increasing number of refugees – are addressed by corporatist arrangements. This might also give an indication of the future relevance of corporatism.

Apart from being corporatist survivors, the three countries in focus - Denmark, the Netherlands and Austria – represent different traditions of corporatism with regards to, e.g., to what extent formal tripartite structures exist and how important they are, and to what extent regulation of wage and working are excluded from government control and placed under social partner self-governance.

More specifically, the paper will seek to answer two research questions: 1) To what extent are the social partners in the three selected countries still able to influence the regulation of old and new societal challenges through corporatism (in the form of tripartite arrangements) after the Great Recession? 2) Why has corporatism survived in these countries and which factors explain best the development in their corporatist arrangements?

Theoretically, the paper will draw on studies of corporatism and of Varieties of Capitalism as well as other studies related to these two traditions. The methods used in the paper are, firstly, analyses of 41 semi-structured interviews (with government representatives, employers’ organisations, trade unions and organisations representing municipalities, as well as a few researchers) and, secondly, analyses of relevant legislation and other policy documents.