Revival of Alliance for Jobs unlikely at present

In February 2003, German trade unions declared recent government efforts to revive the moribund tripartite Alliance for Jobs, Vocational Training and Competitiveness a failure, for the time being at least. The unions stated that this was due to unbridgeable differences between themselves and employers' organisations, which have proposed a controversial job creation plan.

On 6 February 2003, German employers put forward a plan which, they argued, would help create much-needed jobs. The plan was rejected by trade unions, which criticised it strongly. The day before, the Federal Labour Office (Bundesanstalt für Arbeit, BA) had announced that the number of unemployed people in Germany had risen more sharply in January 2003 than had been expected, to a total of 4,274,000 (seasonally adjusted), and the federal government had emphasised that fighting unemployment was its 'highest priority'.

The employers' plan was set out in a controversial speech by Dieter Hundt, the president of the Confederation of German Employers’ Associations (Bundesvereinigung der Deutschen Arbeitgeberverbände, BDA). It resulted in a clash between employers and trade unions which has, for the moment at least, 'buried' the tripartite national Alliance for Jobs, Vocational Training and Competitiveness (Bündnis für Arbeit, Ausbildung und Wettbewerbsfähigkeit) which the government has been attempting to revive since December 2002 after nearly a year without a top-level meeting of the Alliance (DE0212205F). When the Alliance for Jobs was set up in 1998 after the Social Democratic Party (Sozialdemokratische Partei Deutschlands, SPD) and Alliance 90/The Greens (Bündnis 90/Die Grünen) coalition government came to office, this tripartite arrangement between the federal government, employers and trade unions was supposed to be the most important decision-making forum for labour market and social policies (DE9812286N).

Mr Hundt suggested a deal between employers and trade unions, in a six-point plan designed to promote a tripartite consensus to 'get us out of our crisis in growth'. According to this plan, employers would guarantee a vocational training position to every young person who qualified for one. In return, employers demanded that unions accept wage moderation in the medium term and effective 'opening clauses' in collective agreements (ie allowing firms to deviate from the agreements in certain circumstances), as well as collectively bargained solutions to further training and qualification issues. Moreover, the employers asked the government for lower social security contributions and no tax increases in the near future, as well as a reduction in the current employee protection against redundancies which, according to Mr Hundt, hampers employment creation. The leader of a major employers’ group has proposed that the current protection rules be changed so that they apply only to companies with more than 20 employees and to workers who have been with the company for three or more years. Currently, employment protection legislation relating to redundancies applies to companies with more than five workers.

However, the proposal, which - had it been kept confidential - was to have been discussed in the Alliance for Jobs, was bluntly rejected by the trade unions. Michael Sommer, the president of the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) rejected any continuation of the Alliance for Jobs in the light of such demands. Frank Bsirske, the president of the Unified Service Sector Union (Vereinte Dienstleistungsgewerkschaft,v er.di) stated that 'the Alliance for Jobs has no future'. Union representatives thus stated that the recent government efforts to revive the Alliance had failed, for the time being at least, due to unbridgeable differences between employers and unions.

Although Wolfgang Clement, the Minister for the Economy and Labour, has appealed to both sides to return to the talks, this does not appear to have had any effect, and a meeting between employers and unions is unlikely in the near future as trade union leaders have accused the federal government of siding with employers. Two weeks earlier, the Minister had enraged unions and large segments of the ruling parties by calling for looser dismissal regulations which would partly reverse legislation making it more difficult for small companies to dismiss workers which the SPD/Green government implemented when it came to power in 1998 (DE9901291N).

Leading German economists have often warned that the government will very rarely be able to negotiate any package of sweeping labour market reforms with the trade unions. Indeed, even before any new talks within the Alliance recently became a possibility, unions had already threatened to end cooperation with the federal government if it did not stop some of its labour market reforms, such as relaxing job security laws and decreasing unemployment assistance (DE0211205F). Others claim, however, that the Alliance can be regarded as a major policy failure by the government, mainly because of a lack of a clear-cut strategy to ask for anything in return for major concessions to employers and, especially, to trade unions. Therefore, according to these critics, the social partners, and in particular the trade unions, have hardly deviated from their conflictual positions. This may explain, on the one hand, why important topics have not even been discussed seriously in the Alliance for Jobs, and, on the other hand, why structural reforms carried out in 'package deals' have been extremely difficult within the tripartite arena in Germany.

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