The crumbling pillars of social partnership

Abstract

"First fissures in the West German industrial order were observed in the 1980s when unions divided over how to respond to persistend unemployment. Opposing the reduction od weekly working hours pursued by the left wind of the union movement, the Kohl government invited employers, works councils and dissenting unions to rely on the social security system for reducing the supply of labour. Simultaneously it took steps to curtail union power. For a short time, unification restored tripartite co-operation as government, business and labour worked hand in hand to transfer West German institutions to the new Länder of the east. The ensuing economic crisis, which was exacerbated by the accelerated internationalisation of European economies, drove a wedge in the employers' camp, caused a mismatch between institutionalised union strength and economic conditions, and forced the government to do something about rising social security expenditures and public debt. When in 1996 government attempts at consensual labour market and social security reform failed - mainly due to opposition in the government camp demanding more aggressive intervention - a solution was sought by unilateral legislation. Causing unprecedented union protest while falling short of business demands, it contributed to Kohl's defeat two years later." (excerpt)