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DER SPIEGEL" Alliance for Jobs" - a suitable tool to improve the employment situation in Germany?
By Markéta Zelenka
Introduction
As unemployment is what worries politicians and employees the most in today´s Germany chancellor Schröder and the Social democrats are trying to renew the idea and existence of an Alliance for Jobs (Bündnis für Arbeit). The main idea behind this strategy, enforced and favored by the Social democrats (and the labor unions in 1996 and 1998), is to fight mass-unemployment by a "joint-action". This means that not only the government and labor unions are trying to fight unemployment in Germany by using the tools they have but that the government, labor unions, German employers and social associations try to interact and agree on a strategy which could reduce unemployment in Germany. It should be seen as an attempt to contribute to the improvement of the whole economical and employment situation.
History and political roots
The economic policy of Karl Schiller, minister of economic affairs in the years of 1966-1972, can be seen as a pioneer of a labor market or economic policy as the new government of Social Democrats pursue with the insertion of the Alliance for Jobs. Karl Schillers economic policy is known as the policy of a "concerted action" (Wirtschaftspolitik der Konzertierten Aktion). The ideas of Keynes were very present during this period in Germany and had a big influence on the economic policy. Due to this orientation the Stabilitätsgesetz (StWG), a law on promotion of economic stability and growth passed in 1967and created an orientation on four "magic aims" (stability of prices, high employment rate, economic growth and an outside-economical balance). For reaching these aims new instruments have been available. In general it can be said that the StWG and the new instruments extended the power of the government. The concerted action was among those new instruments, stimulated by the Council of experts (Sachverständigenrat). With the influence of Karl Schiller it developed to an institutionalized, regular dialogue between the minister and until 80 representatives from ministries, economy, economical associations and the labor unions. During work it became clear that the expectations of employer assosiacions and labor unions differed and so disabled the outcome and effectivness. But still the concerted action made clear, that the German government did not consider the labor unions as an enemy. Karl Schiller called the concerted action the "table of social reason". (Anderson 1997: 538)
Ever since the 70´s the idea of a concerted action has been subject of debates. Mainly the idea was picked up by corporatists as it is compatible with the thoughts of corporatism (Neokorporatismus). It means the "incorporation of organized interests in politics and their participation in the formulation and execution of political decisions" (Anderson 1997: 377).
Analyzing the European welfare today Martin Rhodes states that external factors as international competition and globalization are placing pressure on wage and non-wage costs and are constraining the welfare states performance in Europe. He draws out that countries which successfully adjust their economies to the new demands of the era of globalization, global trade etc. will be those which adjust the labor- and product markets (increase efficiency) but at the same time "preserve social cohesion and trust" (Rhodes 1998: 179). He discusses the idea of a Competitive Corporatism as he states that through globalization and the world competitiveness social corporatism is no longer possible. This does not necessarily mean that the future is either neo-liberal or a big, big problem - the way he recommends for many European countries is competitive corporatism. He emphasizes the importance of the institutional structure and objectives that have to (and will) be prioritized in the adjustment strategies as a greater external and internal flexibility in labor markets. Due to competitive corporatism, which means that competitiveness, macro-economical stability, employment creation and redestribution will be prioritized and the future social pacts will be productivity-oriented and pragmatic (Rhodes 1998: 200).
In my opinion this can be observed not only in Germany but in different countries in the world: the stronger orientation towards economy, markets, productivity and stability. Also the effort for an Alliance for Jobs in Germany was born due to this orientation and the wish for a successful try to solve the problem (even a government of social democrats cannot ignore a worldwide direction - above all not in the era of globalization) - but also because unemployment as an economical problem has become a societal problem.
Therefore it seems reasonable (and a success is even more desirable) that during his inaugural speech on Nov. 10th, 1998 Chancellor Schröder stated that the problem of unemployment today can only be overcome if "all actors acting in society" participate. The reason he gave for the "Alliance for Jobs" is that only the combination of all actors in national economy (and their interests) can produce lasting employment - and only if they act together, meaning "Alliance for Jobs - perceive responsibility together".
Throughout the whole process every partner has to fulfill what has been agreed on - so that every side involved is in charge of contributing to the improvement – giving only the best he can. "Cooperation, future-will and confidence" are the coordinates Schröder draws up for the Alliance for Jobs (Inaugural speech, 10.11.´98). But the Alliance for Jobs is not only an alliance to secure existing jobs and find ways to create new ones - the new government and Chancellor Schröder enlarged it to an alliance that also should work for youth employment. Due to this it is also called alliance for Jobs and education - meaning that the solutions to be found should as well secure training vacancies for young people.
The Netherlands as role model(?)
Throughout the discussion about the necessity and the doubts that have been stated about the impact that the Alliance for Jobs will have on the employment situation in Germany, supporters of the Alliance idea quote the success of the Alliance for Jobs in the Netherlands. It is true that the unemployment rates in the Netherlands decreased during the last ten years – and the biggest part for this development can be traced back to the existence, engagement and agreements of the Alliance for Jobs.
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DER SPIEGEL
In 1982 , during a deep recession the partners signed the agreement of Wassenaar. Within this agreement the state (who is able to intervene in the collective bargaining) obliged himself to hold back. The labor unions on their behalf pursued a moderate collective wage bargaining policy (Tarifpolitik) and agreed with the employers on the strategy that over the years the increase of wages stay lower than in the strong competition in Germany (Ohne Zugeständnisse geht nichts, 50/98).
With decreasing continued payment of wages for sick people (as the Kohl government has introduced as well but what already has been canceled by the new German government by recreation of continued wage-payment in the case of disease) and public spending cuts the state in the Netherlands changed the conditions but on the other hand spent enormous sums for the reconcilation of these social cuts (for example on the early-pension-system). These facts did suite the employers well – that is also a reason why German employers regard the Netherlands as a model. But even German labor unions quote the Dutch success. They praise the flexibilization of working-time. Many part-time jobs have been created and comparing the working-time in the Netherlands and Germany it can be seen that the difference cannot be found in the working-time but that the same extent of existing work is only divided up differently.
The question is, can the Dutch model be imported and implemented in Germany? - a question many experts don´t know a definitive answer to. It is not even clear, if Germany wants to import the whole system and not only the well looking statistics. At many points the Dutch model is not as perfect as it seems. (For more information about the Dutch Polder Model see The Dutch "Polder Model" - An answer to the German crisis?)
Content and needs within an Alliance for Jobs
There are several points that have to be worked on so that an Alliance can really contribute to the employment situation, as many of them have already been mentioned above. Basically the thinking has to change from the wish preserving the old system to an openness towards a risk of reforms, adjustment and restructuring.
The general concept of an Alliance for Jobs is:
One aim of this agreement is to cut labor costs. Another aim is and should be to flexibilize working-hours for example to include women in the labor market by part-time jobs. The responsibility of the German government is as well to find the right policy mix.
Items considered necessary for this mix (by Schröders economic experts):
These points are considered very important to multiply the chances for allowances of the partners within the Alliance. (DIE ZEIT Nr. 51)
A success of the Alliance for Jobs can only be achieved if every participating partner contributes to the effort - and logically the interests of the different representatives differ. Of course they do because every representative within the Alliance for Jobs is representing different groups with different interests and needs of the German society.
On the 7th of December 1998 chancellor Schröder invited the representatives to a first conversation and discussion about the future of the Alliance for Jobs. In this first session participated six members of the German government, four representatives of the employers and five labor union heads. During this very satisfying conversation, as everybody told the press afterwards, several problems and questions have been discussed. One topic that has not been mentioned during this first conversation is the collective bargaining policy (Tarifpolitik) - a very sensitive subject. At the beginning of the discussions the "Regierungschef" of the Netherlands, Wim Kok, gave a surprising advice: Many topics should be discussed simultaneously. "The more to do, the more possibilities for a balance of interests" – that´s Koks way to a consensus.
Topics, Schröder announced in the run-up which he considers important to mention and discuss are e.g.: What does it mean (and how could this happen) to concentrate welfare aid on the really needy people? What possibilities do instruments as investive wage (Investivlohn) and related ones contain? What scope will be created for investments? What effect will Europe in its new shape have on the labor market? among others. Many points have to be discussed and nobody should expect a prompt miracle but on the other hand it looks like Koks suggestion to an easier and quicker consensus can be easily fulfilled if desired.
Conclusion
At this point there is no answer to the question whether the Alliance for Jobs will be successful or not. The answer lies in the future and we can only speculate. Without doubt a success is desirable. The idea of corporatism and Rhodes idea of competitive corporatism is even more worth a try in the era of globalization and the founding of the European Union in a social Europe. If so many different countries are able to work out binding agreements it should be possible to reach a solution within one country.
If the situation in the Netherlands could be improved, even if it took ten years, it can be done in Germany too. It seems a good sign too, that also Italy wants to establish a social pact close to the Alliance for Jobs with which the regulated labor market should be flexibilized.
To a large extend the success of the Alliance in Germany depends on the readiness of the participants, the represantatives in the Alliance and the best possible compromises that will and have to be achieved. It also depends on the support and the policy mix of the German government. Of course the Alliance can also fail because interests differ too much. The present situation in Germany shows how fragil the Alliance is: labor unions are pushing for higher wages of about 6.5% while the employers offer about 3.5% max. The situation is tense at the moment and endangers the future of the Alliance.
With the new social democratic German government one possible reason for a failure of the Alliance disappeared. The new government will not cut social spending and follow social dumping. And if somebody is able to take along the labor unions - the Social Democrats Party (SPD) hopefully can. But other threats may be the new tax reform, the labor unions´ pushing for higher wages right now, so that as well employers as employees (better to say labor unions) will sabotage further negotiations.
Nevertheless it would be great if the future will show that an interaction of all participating actors - despite diversing interests - can contribute to an improvement for the German economy and society. It would surely create an atmosphere of openess, interest and caring among the different groups of interests - also in the German society and besides that show that Germany is engaged and seriously working on its role as a modern, opened and democratic country.
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