The rise of regional employment alliances

In spring 1999, almost all German federal states are covered by "regional alliances on employment" of some kind. This feature summarises developments and activities since the mid-1990s.

In the 1990s, Germany has witnessed the emergence of employment alliances and pacts at all levels in order to avoid redundancies, and sometimes even to create new jobs (TN9710201S). These have ranged from national, regional or sectoral tripartite or bipartite employment alliances and pacts, to company-level agreements between management and works councils or trade unions (DE9902293F).

At the overall national level, unsuccessful efforts were made in 1995/6 to conclude an employment alliance (DE9702202F), and a tripartite "alliance for jobs" (Bündnis für Arbeit) was finally concluded by the government, trade unions and employers' and business associations in December 1998 (DE9812286N). At regional level, discussions among the relevant parties - usually regional governments, trade unions and employers' and business associations - over the issue of preserving and creating employment got underway after the abortive national initiatives in 1995/6. There have been three types of regional activities:

  • the 1997 joint initiative of the federal government, business and trade unions, aimed at improving the economic and labour market situation in the whole of eastern Germany (DE9806166F);
  • the "territorial employment pacts" initiated and financed by the European Commission (DE9807272F); and
  • employment alliances at the level of the individual federal states (Bundesländer). There have been two waves of such alliances, the first in close association with the 1995/6 national initiatives, and the second connected with the 1998 national alliance.

The table below outlines developments in all 16 of Germany's federal states.

Regional employment alliances: developments in the federal states
Baden-Württemberg In early 1996, within the framework of existing regular tripartite talks, there were discussions on an "alliance for employment". The regional government issued a concept paper for such an "alliance", which formulated some basic ideas but did not include any financial provisions. In March 1996, the regional organisation of the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) left the talks, mainly because it doubted that "corporatist" pacts could be effective in fighting unemployment. However, the traditional tripartite peak-level talks have continued. Talks on a new "alliance for employment" were scheduled for 4 May 1999.
Bavaria In January/February 1996, the Bavarian state government and regional trade unions and employers' and trade associations agreed a " Bavarian employment pact" (Beschäftigungspakt Bayern). Subsequently, on 11 June 1996, the partners agreed a formal employment pact "treaty" which included concrete measures to stop the increase in job losses and to halve the number of unemployed people by 2000, essentially through the creation of new jobs and the establishment of new companies. Measures relevant to industrial relations included an increase in part-time jobs and working time flexibility, as well as the introduction of "opening clauses" in collective agreements. On 1 July 1998, the Bavarian employment pact was reviewed by all partners involved and considered to have been successful (DE9807171N).
Berlin and Brandenburg In 1996, the regional governments issued concept papers for a "Berlin alliance for the preservation of production sites and employment" and an "alliance for employment" in Brandenburg. The governments drew up the papers in consultation, believing at the time that the two federal states would soon merge. In January 1999, a first round of tripartite talks on forging an alliance for Berlin took place, focusing on youth unemployment, vocational and further training, and planning for public health services. In Brandenburg, tripartite talks took place in March 1999 on activities to fight youth unemployment.
Bremen There were talks on an alliance in 1996 which resulted in: an appeal to offer more places for vocational trainees; measures to fight illegal and clandestine employment; and measures to promote small and medium-sized enterprises. Talks on employment and vocational training were repeated in 1997 and laid the foundation for forging an "employment alliance" in 1997. This pact included a territorial employment pact, financed by the EU structural funds, and additional measures. In January and April 1999 talks took place on a new "alliance for employment and training". Issues of debate were youth unemployment, vocational training and further qualification, and business promotion.
Hamburg A regional employment pact was agreed in May 1996. In summer 1998, a "Hamburg initiative for employment and vocational training" was agreed, promoting the establishment of new enterprises, supporting the restructuring of business, and fighting youth and long-term unemployment. In January 1999, an appeal on youth employment was issued.
Hessia An "alliance for employment" was concluded in June 1996. Since then, the parties have issued several joint declarations on issues such as vocational training, active labour market policies, start-up of new enterprises, technology policy and the modernisation of the public sector.
Lower Saxony In December 1998, the regional government initiated tripartite talks on an employment pact. It was agreed that the pact would cover measures to fight youth unemployment, vocational training, start-up of enterprises and public tenders.
Mecklenburg-Vorpommern In December 1998, an "alliance for employment" was established, focusing on youth unemployment, regional development, start-up of new enterprises, and employment in the social services sector.
Northrhine-Westphalia In December 1998, the regional peak associations of trade unions, industry and employers together with the regional government agreed a regional "alliance for employment, training and competitiveness" (DE9902198N). It was agreed that the following topics should be discussed and dealt with at regional level: youth unemployment; qualification; education and training; structural change in trade, banking and insurance; and working time, especially as regards part-time schemes.
Rhineland-Palatinate In spring 1996, the regional government issued a proposal for an employment pact. Furthermore, there are frequent tripartite meetings, the so-called "oval tables". Issues recently discussed included vocational training and youth unemployment.
Saarland A "Saarland alliance for employment" was established in January 1999. Issues for discussion are new areas of employment, vocational training, youth unemployment, and the flexibilisation of work.
Saxony This federal state has had a consensus-oriented tripartite economic policy since 1991, in close association with the post-reunification economic transformation process. In 1995, government, business and trade unions initiated an "innovation and labour market offensive". In 1997, a foundation entitled "Innovation and Employment Saxony" (Stiftung Innovation und Arbeit Sachsen) started operations.
Saxony-Anhalt In 1996, attempts to forge a regional employment pact failed, but the idea was revived in late 1998. On 28 January 1999, a first meeting on an "alliance for employment and training" was held, debating the issues of vocational training places. It was agreed to continue the talks, focusing on an "intergenerational contract" on employment, tax policy, energy prices, support for medium-sized companies and innovation, and an alliance for the environment.
Schleswig-Holstein In early 1996, the regional government issued a concept paper for a regional employment alliance, including, among other issues, active labour market policy measures and an appeal to reduce overtime hours. Although the paper embraced the rhetoric of pacts, actual tripartite talks or negotiations on the alliance never took place. In the area of vocational training, an "alliance for vocational training 97" (Bündnis für Ausbildung 97) was agreed in 1997. The aim was the creation of more vocational training places and the improvement of framework conditions for training. Similar alliances were concluded in 1998 and 1999. On 1 February 1999, the regional government, employers' associations, trade unions, chambers of commerce and crafts as well as the employment administration agreed a "Schleswig-Holstein alliance for employment" (Bündnis Arbeit für Schleswig-Holstein). The new deal includes: labour market policy measures to combat youth unemployment, support further education and create jobs through overtime reduction, partial retirement and increased labour market flexibility; and measures to improve supply-side conditions and promote structural change, supporting new business start-ups, and speeding up planning and approval procedures so as to make Schleswig-Holstein a more attractive place for business investment.
Thuringia Since 1996, regular talks have been held between regional government, the regional DGB organisation and the regional peak association of employers' and industry associations (Verbände der Wirtschaft Thüringens).

Commentary

In 1999, regional employment alliances of some sort exist in nearly all federal states. While the issues dealt with mostly include unemployment, youth employment, vocational training, and regional development, the alliances differ markedly in a number of important aspects, and may be distinguished according to:

  • form. The alliances range from unilateral or trilateral proposals and declarations of intent (as in Rhineland-Palatinate and Schleswig-Holstein), to trilateral talks and discussion groups (Baden-Württemberg, Saarland and Thuringia) to formal tripartite written agreements (Bavaria, Bremen and Northrhine-Westphalia);
  • "maturity". Some alliances have never left the stage of an exchange of concept papers (Baden-Württemberg), while others have consisted only of agreement on the issues to be discussed (Saxony-Anhalt), and others have resulted in appeals and joint declarations (Hamburg and Hessia). Still others have led to comprehensive policy programmes including evaluation procedures (Bavaria, Bremen). Furthermore, some initiatives have failed, with both explicit failures - for example, when actors left the bargaining table for good (Saxony-Anhalt in 1996 and Baden-Württemberg in 1996) - and implicit failures - cases where talks petered out and were abandoned without formal declaration of failure. Most of the 1998/9 agreements cannot yet be evaluated as they are still in the making.

Why is it that almost all federal states are covered by regional alliances for employment? Several reasons spring to mind. The German federal political system is complex, allocating tasks, responsibilities and rights in certain policy fields (especially in taxation and economic policy) to different levels of government. The implications of this are various.

In the German political multi-level governance system, the power of the Länderis especially pronounced in the Bundesrat, the upper house of parliament which consists of representatives of the Ländergovernments, and which has potential veto rights in a number of policy fields. So, even if a tripartite consensus at federal level may be reached through a national-level employment alliance, the resulting federal government initiatives may require the approval of the Länder. This potential problem may be eased if a system of "vertical political feedback loops" in policy-making between the national alliance and the regional alliances can lead to consensus between the two levels. For example, regional alliances may influence regional governments in order to avoid a veto in the Bundesrat. Another reason for regional alliances may be that there is scope for consensual policy making at regional level in areas such as regional structural and economic policy. Furthermore, regional alliances may contribute to a better implementation of federal-level agreements and policies, and also serve as an early warning system in the event that federal-level decisions do not take into account regional differences and special circumstances. (Stefan Zagelmeyer, IW)

Reference: "Am Ende von Sozialpartnerschaft und Neokorporatismus? Das Beispiel 'Bündnis für Arbeit'", B Rehder, unpublished Masters thesis (Diplomarbeit) at the Institute for Political Sciences at the University of Hamburg (1997).

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