A Question of Appropriatness

Since the mid-1980s German collective bargaining coverage of employees has continuously declined. Current explanations attribute this decline to structural changes in the German economy, but structural factors by themselves fail to explain why coverage has increased in other European Coordinated Market Economies during the same period. The resulting divergence in coverage can instead be attributed to differences in employer support for the use of statutory mechanisms to shore up collective bargaining. As shown here, German employers have, in contrast to employers elsewhere, continuously opposed such measures. Based on a set of semi-structured elite interviews and case studies, I analyse what explains this opposition. This thesis shows that German employer associations oppose a frequent use of statutory extension by default based on 1) a strong normative aversion to state intervention, 2) a normative appreciation of wage competition, and 3) the believe that statutory extension can...Show moreSince the mid-1980s German collective bargaining coverage of employees has continuously declined. Current explanations attribute this decline to structural changes in the German economy, but structural factors by themselves fail to explain why coverage has increased in other European Coordinated Market Economies during the same period. The resulting divergence in coverage can instead be attributed to differences in employer support for the use of statutory mechanisms to shore up collective bargaining. As shown here, German employers have, in contrast to employers elsewhere, continuously opposed such measures. Based on a set of semi-structured elite interviews and case studies, I analyse what explains this opposition. This thesis shows that German employer associations oppose a frequent use of statutory extension by default based on 1) a strong normative aversion to state intervention, 2) a normative appreciation of wage competition, and 3) the believe that statutory extension can itself undermine coverage. Furthermore, I demonstrate that when there are highly salient problems in a sector which employers believe can be remedied by statutory extension sectoral employers can overcome the German default position and use extensions however only to an extent that is perceived as strictly necessary.Show less

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A Question of Appropriatness