Future of national Alliance for Jobs under debate

In December 2002, the German government launched an attempt to revitalise the tripartite national Alliance for Jobs, Training and Competitiveness, which was set up in 1998. After nearly a year without a top-level meeting of the Alliance, the government is now seeking new ways of improving such consultations. While employers and trade unions mostly welcome this initiative, it is not yet clear who will participate and which subjects are to be covered by a new Alliance.

On 10 December 2002, Wolfgang Clement, the new Minister for the Economy and Labour, met with Michael Sommer, president of the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB), and Dieter Hundt, president of the Confederation of German Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA), to discuss the chances for a revival of the tripartite Alliance for Jobs, Training and Competitiveness (Bündnis für Arbeit, Ausbildung und Wettbewerbsfähigkeit). While the Alliance has not been formally abandoned, the last top-level meeting was held in early 2002 and many observers have expressed doubts that the consultations will continue.

While the results of the December meeting are considered confidential, because participants want to consult with their organisations first, Mr Clement declared soon afterwards that there will be another top-level meeting in spring 2003, probably shortly after regional elections in the states of Lower Saxony and Hessia are concluded. Most participants, however, seem to agree that the Alliance must be modified substantially to avoid the problems experienced in previous top-level consultations.

Background

The Alliance for Jobs, Training and Competitiveness was established in December 1998 as a new permanent tripartite arrangement at national level, involving various issue-related working groups as well as top-level talks between the leading representatives of all three parties. Initially, the newly elected coalition government of the Social Democratic Party (Sozialdemokratische Partei Deutschlands, SPD) and Alliance 90/The Greens (Bündnis 90/Die Grünen) promoted the Alliance as its most important project in order to reduce unemployment and to safeguard vocational training. As shown in the table below, the eight top-level meetings which took place up until January 2002 covered considerable ground.

Top-level meetings of the Alliance for Jobs, Training and Competitiveness
Date of meeting Subjects on agenda of meeting
7 December 1998 Indirect wage costs and flexibilisation of work (DE9812286N).
25 February 1999 Creation of special committees.
6 July 1999 Reform of company taxation, partial retirement, pensions, labour market policies for east Germany, vocational training and reduction of overtime work (DE9907219F).
12 December 1999 Training, special government programme against youth unemployment and special projects for low-skilled workers (Mainz and Saar models - DE0005260F).
9 January 2000 Partial retirement and collective bargaining (DE0001232F).
10 July 2000 Training, reduction of overtime work, working time accounts and flexibilisation of work (DE0007272F).
4 March 2001 Further training at company level, employment of older workers, active labour market policies and pensions (DE0103213F).
25 January 2002 Dispute on pay policy (DE0202205N).

Source: Federal government, own composition.

At the most recent meeting in January 2002, it was very obvious that the Alliance faced significant problems in keeping the divergent interests of participants in line. While most of the trade union representatives insisted that pay is an issue to be negotiated exclusively at the collective bargaining table between unions and employers and strongly resisted wage guidelines, representatives of employers, industry and crafts demanded that wages be put on the Alliance's agenda. The conflict became more intense as major unions such as the Metalworkers Union (IG Metall), the Mining, Chemicals and Energy Union (Industriegewerkschaft Bergbau, Chemie, Energie, IG BCE) and the Building, Agricultural, and Environmental Union (Industriegewerkschaft Bauen, Agrar, Umwelt, IG BAU) prepared to negotiate new industry wide-agreements for millions of employees in their respective industries (DE0204201N).

In addition, the political climate seemed to heat up in the run-up to the election of a new parliament (Bundestag) on 22 September 2002. During this process, leading representatives of employers and industry seemed to be in doubt whether they should support the red-Green coalition government by way of participating in tripartite consultations, or rather wait for a different government to take office - something which eventually did not materialise, as the ruling coalition was reformed after the September election (DE0211205F).

New forms of consultation

With the Alliance in limbo, the federal government started to seek out new ways to consult the social partners as well as other interest groups and experts. While in its election manifesto the SPD still called for a continuation of the Alliance for Jobs (DE0208204F), its coalition partner, Alliance 90/The Green, did not do so. The SPD, however, has not put the Alliance at the top of its agenda. Instead, Chancellor Gerhard Schröder decided to set up the 'Hartz Commission' (DE0209205F) to find comprehensive solutions to Germany’s persistent unemployment problem. The Commission was composed of 15 experts – two academics and 13 members drawn from trade unions, management, consultancies, company managing boards and political and economic circles. After the Commission issued its final report in August 2002, the government promised to take up all its proposals and transpose them into binding laws. This process is still under way (DE0211205F) and the federal government is currently approaching the opposition majority in the Bundesrat, the second chamber of Germany’s parliament, to seek its consent.

Somewhat copying the concept of the Hartz Commission, the government has decided to launch a Commission for maintaining the long-term financial health of the German system of social security (Komission für die Nachhaltingkeit in der Finanzierung der sozialen Sicherungssysteme), also called the 'Rürup Commission' after its chair Bert Rürup, which is to find new ways to stabilise the German health insurance and pension systems. Besides several leading scholars in the field of pensions, health and economics and representatives of special interest organisations, trade unions and employers’ associations are represented as well.

A new future for the Alliance for Jobs?

A first impetus for a new version of the Alliance for Jobs came from Hubertus Schmoldt, chair of IG BCE, who stated that the Hartz Commission's proposals are an important step towards growth and employment but should be complemented by a new round of talks in the Alliance for Jobs. He presented the idea of integrating the business managers of large companies into the Alliance in order to reach more binding and concrete results in the talks. From the unions’ perspective, previous consultations suffered most from the low ability of employers’ representatives to conclude binding agreements on behalf of their constituency. Thus, Alliance accords in the areas of reducing overtime and increasing the number of apprenticeship posts were mostly based on non-binding declarations rather than on binding agreements. Furthermore, Mr Schmoldt called for a new attempt to discuss the report of the Alliance's 'benchmarking' group, which had only little impact on its appearance.

The government took up this approach and supported the idea of further rounds of meetings of the Alliance for Jobs. Chancellor Schröder is currently calling for a meeting at the beginning of 2003 under reformed conditions, based in part on Mr Schmoldt’s idea, in that large companies’ chairs and academics should be integrated into the top-level talks.

The presidents of the organisations representing business - the German Association of Chambers of Commerce (Deutscher Industrie- und Handelskammertag, DIHK) (formerly known as Deutscher Industrie- und Handelstag, DIHT), the Confederation of German Industries (Bundesvereinigung der Deutschen Industrie, BDI) and the Central Association of German Crafts (Zentralverband des Deutschen Handwerks, ZDH) - have welcomed new talks if they take place in a climate without 'taboos' and are not open to the public. Chancellor Schröder offered a meeting in January 2003 to the employers, in order to remove the tensions between the government and the employers which have increased in recent months around the implementation of the Hartz proposals.

Commentary

At the beginning of its first term of office, the Alliance for Jobs was announced as a core project of the red-Green government by Chancellor Schröder. During recent years, various commissions - on matters such as immigration, reform of job placement and currently a revised public health system – have become more and more important. The main reason for this can be seen in the fact that the Alliance for Jobs was not able to mediate conflicts and to achieve the promised substantial results. Nevertheless the Alliance did have some achievements. Particularly in the field of vocational training, the government received impetus for legislative measures but the problem remained that especially the employers’ organisations could not commit their member companies to the negotiated targets. It remains to be seen whether the integration of managers into the Alliance can overcome this problem. (Martin Behrens and Torsten Niechoj, Institute for Economic and Social Research, WSI)

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