Carol Jess

MA ILTUS – 18 November 2008

Decline in industrial employment:

Germany & UK – show differences in industrial relations models:

Decline in industrial and manufacturing jobs was felt across industrialised world from 1980s
onwards. Most countries saw a reduction in trade union membership throughout that period,
the UK saw a fall in density from 51% in 1980 to 39% in 1990 and 27% in 2000, but
Germany did not experience such decline until 1990s, after reunification. The density figures
for West Germany were 35% in 1980 31% in 1990 but 25% in 2000 (including East
Germany). (Visser, 2007, 100). The rate of decline during the period 1991-2001 was 4.5%,
a figure unprecedented in post-war German history. (Visser, 2007)

What could be different about Germany which made the timing of the decline of union
membership show a different pattern. I think if you compare the UK and Germany generally
the German model of industrial relations was more centralised, and seen as a partner rather
than an antagonism. Since 1979 in the UK, however, not only were employers looking to
reduce their dealings with unions, throughout the period of decline in mining, steel making
and other major industrial sectors, the government also intended to make trade unions less
powerful, and so encouraged the breakdown of the previous industrial relations models
through legislation and general industrial policies.

As part of the explanation as to why Germany did not suffer such a big decline in union
membership and density in the 1980s, Visser discusses “Union compatible institutions”
(Scruggs & Lang as discussed in Visser, 2007). Scruggs and Lang postulate three
indicators of union compatible institutions:Ghent, workplace representation, bargaining
centralization.

The Ghent system of where welfare is administered by unions is prevalent in Iceland,

Finland, Denmark and Sweden and so for any comparison between the UK and Germany is
irrelevant, but we can use the extent of collective bargaining centralization of UK and
Germany for possible explanation for the differences and the similarities in declining
membership if linked to decline in manufacturing.

(It is interesting to note that while the Ghent system is not of use in comparing UK with
Germany a paper by Böckerman and Uusitaloshows that the erosion of the Ghent system in
those countries can be linked to declining union membership there also. But for the purpose
of showing a link between the three indicators of union compatible institutions the
comparison between the maximum union densities and the timing of when the maximum
union densities werein the Ghent countries as opposed to non-Ghent countries, particularly
the UK and Germany is interesting. The Ghent countries had a maximum value of union
density of 82.6% in 1996 whereas Germany’s maximum value was 35.9 in 1991 and the
UK’s 50.1 in 1979.)

Collective bargaining

As a comparison then, in 2006 in the UK it is difficult to find out to what extent collective
bargaining is used. There are no official recording of collective bargaining, most of what
there is is carried out atx company or workplace level According to European Industrial
Relations Observatory Online 33.5% of employees were covered by collective agreements in
2006 down from 35.3% in 2005, there were only 19.6% in the private sector. This is

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interesting because Visser shows (in the table at 109) that the UK economy has a union
density of 52% in the public sector, 15% in services and 22% in industry, Whereas Germany
has only 24% in the public sector but 16% in services and 29% industry. The crucial
differences for union density between the two countries are that UK unions appear to have
been more successful in recruiting or maintaining their membership in the public services.

In Germany, however, there are more detailed statistics available for collective bargaining
coverage, on the same website. In 2006 67,289 valid collective agreements were officially
registered at the Federal Ministry of Labour and Social Affairs, these includeagreements
between unions and employers’ associations as well as company agreements (comparable
to the UK type of collective agreement). While the number of agreements is registered, the
density of their coverage is not reported in this source, but in 2004 (Vissen notes) the
coverage in Germany was63%. For ease of comparison in 2004 UK figures were 35%.

Vissen discusses the collective bargaining coverage throughout the EU, noting that in 2004
but before the EU expansion of May 2004 70% of EU employees were covered by collective
bargaining, meaning that even in Germany the number of employees covered by collective
bargaining was less than the EU average, with the UK having around half the EU average.

While in the UK in the 1980s employers and the government no longer supported the trade
unions as a partner in industrial relations, in Germany there seemed to be no change in the
relationships between the three partners, and even when union membership in Germany
began to decline throughout the next decade, the practices and norms of the industrial
relations did not change. In Germany there appeared to be continuing advantage for
government, companies and unions to remain in same relationships despite declining
density of membership.

As discussed in Hassel 2007,the interests of the unions and the companies in Germany
continued to interact to allow the status quo to continue. The unions themselves had
monopoly power in their own marketplace, and the fact that their power in the industrial
relations landscape remainedmeant that they didn’t feel the need to compete to recruit the
new entrants to the workforce – women, part-time workers, and ethnic minorities. Their
membership remains relatively homogeneous despite the diversity of the post-industrial
workforce.

Changing nature of the labour market and union decline: similarities for UK and
Germany

The decline in industrial employment in both the UK and Germany has meant a move away
from what some in the trade union movement refer to as “male, pale and stale”. With more
of the workforce employed in the service sector and the public sector the target audience for
union membership has also changed but unions are likely not taking advantagesof these
possible new recruits.

Germany has the biggest gap in the EU between male and female trade union membership.
Both Visserand Hassel comment on this. In the UK average union density is 26.6% with
26.3% of male employees and 26.8% of female employees being members of unions,
whereas in Germany the figure for women is only 14.4% as opposed to 28.6% for men. Why
would this large gap be the case, unless the culture of trade union membership in Germany
has not changed as much as it has in the UK?

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The situation in the UK and Germany with regard to the social norms of trade union
membership may now similar, but Visser believes that given Germany did not suffer the
decline in unionism at the same time as the other de-industralising countries it is now more
difficult for the German trade union movement to reverse this trend. This is due in part to the
social norm theory of trade union membership – in my union we refer to “like recruitinglike”.
If there have been short term advantages, due to their monopoly position and the willingness
of the large employers to continue to bargain with them, for German trade unions to continue
without changing their recruitment base then the problems of revitalisation have simply
moved on a decade, however those who have entered the labour market in the intervening
years, eroding the base from which the monopoly recruitment is maintained then it is harder
to make a case for those new entrants to join – the social norm of joining a union has not
been extended to those new entrants. It is interesting to note the age ranges of trade union
members in both the UK and Germany.

In both the UK and Germany the age group which is most unionised is the over 50s, with 30-
49 year olds next and under 30s almost the same density. If the trade union movement
continues to be unable to recruit these entrants to the labour market then the influence and
power of the movement will further be eroded. In ACCORD we had a specific recruitment
initiative for young members – all three of the reps who volunteered were women, but all
three of them said that the reason they were a union member was social reasons. It’s just
the donething, or their parents encouraged their membership.

I think this social norm of trade union membership is keyto the revitalisation of trade unions
in post-industrial economies, but trade unions do need to think of different ways of re-
engaging the social with the movement. A good example of getting people who otherwise
wouldn’t think of being involved is the partnership between the movement to “Save the NHS”
in the UK (more particularly in England) and both the TUC and Unison. I believe there are
similar health care focussed coalitions in Germany. If the interests of the public, or citizen,
can be seen to be being protected by and in line with those of trade unionists the social
barriers to young people joining unions may be broken, and this could be a reasonable way
to start to reverse the effects of de-industrialisation.

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Bibliography

Böckerman, Petri and Uusitalo, R “ Union Membership and the Erosion of the Ghent system:
Lessons from Finland” Labour Institute for Economic Research, Helsinki 2007 =
http://www.labour.fi/tutkimusjulk/tyopaperit/sel213.pdf

Erne, R “Beyond Competitive Corporatism? Insights from Germany, France and Italy” in
“European Unions; Labour’s Quest for a Transnational Democracy” ILR 2007.

Greer, Ian “Social Movement Unionism and Social Partnership in Germany: The Case of
Hamburg’s Hospitals. Industrial Relations 47, No 4 (2008) 602

Hassel, A “The Curse of Institutional Security: The Erosion of German Trade Unionism”
Industrielle Beziehungen 14(2) (2007)

Visser, J “Trade Union Decline and What Next. Is Germany a Special Case” Industrielle
Beziehungen 14(2) 97-117 (2007)

Waddington, J “Trade union membership in Europe: The extent of the problem and the range
of trade union responses” ETUC/ETUI-REHS top-level summer school, Florence1-2 July
2005.

European Industrial Relations Observatory Online

(http://www.eurofound.europa.eu/eiro/index.htm )