DGB celebrates its 50th anniversary

In October 1999, on the occasion of its 50th anniversary , Germany's DGB trade union confederation organised a special event where the past and future role of the unions in Germany was discussed. There was a broad consensus that DGB played an important role in developing the particular economic and social order which has characterised Germany in the post-war years. During the 1990s, however, DGB has experienced an organisational crisis, the most obvious expression of which has been a dramatic fall in membership.

The German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) held its founding congress in Munich on 12-14 October 1949, establishing a "peak" organisation for the 16 industry-level union federations existing at that time in west Germany. In October 1999, DGB returned to Munich to celebrate its 50th anniversary with a special ceremony and a conference at which trade unionists and representatives of other groups discussed the past and future role of trade unions in Germany.

The reconstruction of German trade unions after the Second World War

Between 1933 and 1945, all free trade unions were destroyed and suppressed by the Nazis and replaced by the "German work front" (Deutsche Arbeitsfront) which was a joint organisation of employers and employees aimed at regulating industrial relations in line with Nazi ideology. However, the reconstruction of free trade unions started immediately after the end of the Second World War and initially led to the creation of various forms of union organisation at local level. Developments were thus very much controlled by the Allied forces, which had divided Germany into four occupation zones (American, British, French and Soviet). However, despite the local differences almost all newly established unions followed the principle of the unified trade union (Einheitsgewerkschaft) which aims to create a common union organisation for all employees, independent of their political and religious beliefs and their occupational status. The major political, religious and occupational divisions within German trade unionism during the Weimar Republic were seen as a major source of political weakness, which might explain why the German labour movement had not been able to defeat the Nazis. The principle of the unified trade union therefore remains a core element of DGB's identity up to the current day and is seen as a major factor in the relative strength of German unions.

Originally, there were two competing organisational models based on the principle of the unified trade union in the early post-war year: a more centralised model aimed at creating a single trade union organisation with sectoral subdivisions; and a more federal model based on autonomous industry-level unions grouped in a joint peak-level organisation. The two models provoked controversial debates among trade unionists, of whom a majority were initially in favour of the centralised approach, because it was seen as a clearer expression of the principle of the unified trade union. Nevertheless, in practice both forms of trade union organisation emerged in the early post-war years.

In the end, the fate of the two models depended very much on the policy of the Allied governments. In the eastern occupation zone, the Soviet military government supported the centralised model in order to build a strong anti-fascist political organisation with a significant communist influence. As early as February 1946, the Free German Trade Union Federation (Freier Deutscher Gewerkschaftsbund, FDGB) was founded as a single trade union organisation for the whole Soviet zone. FDGB later became the "state union" (Staatsgewerkschaft) of the German Democratic Republic (GDR).

By contrast, the British and the American military governments, with the support of the British and American trade unions, very much preferred the federal model and tried to block the attempts of German trade unions to establish a more centralised organisation. The reasons for this approach were manifold: a federal model corresponded more with the models of trade unionism in the UK and USA, as well as being seen as being more democratic - the Americans, in particular, were afraid that a centralised model would strengthen communist forces.

In April 1947, DGB was initially founded as a peak organisation of industry-level unions within the British occupation zone. In the American and French zones, regional peak organisations emerged, for example in Bavaria and Hesse. Finally, five months after the foundation of the Federal Republic of Germany (FRG), DGB was founded in October 1949 as the national peak trade union organisation for 16 autonomous industry federations in west Germany.

50 years of DGB trade unions

At its founding congress in 1949, DGB adopted its first basic programme, which contained a summary of the trade unions' far-reaching political goals for a fundamental reconstruction of Germany's social and economic post-war order. There were, in particular, three principal demands in the first DGB basic programme:

1. "socialisation" of key industries such as mining, iron and steel, chemicals, electricity and banking;

2. national planning of economic development through national trade-cycle and investment policy; and

3. economic democracy through far-reaching co-determination rights.

To sum up, the first DGB basic programme contained an idea of democratic socialism which that time was seen as a kind of "third way" between capitalism and Soviet state socialism. Political developments during the 1950s, however, led to a restoration of the old German "economic elite" and to a full integration of west Germany into the western capitalist world. As a result, it rapidly became clear that the unions' far-reaching economic reconstruction plans were doomed to failure. The unions also had to accept a defeat in their fight for economic democracy. Although the adoption of the Coal, Iron and Steel Industry Co-determination Act (Montan-Mitbestimmungsgesetz) in 1951 had provided for "parity co-determination" (paritätische Mitbestimmung) on the supervisory boards of companies in these industries, the unions failed in their demand to extend parity co-determination to the whole economy, since the new Works Constitution Act of 1952 limited the number of employee representatives on the supervisory board to one-third of all seats.

1950s and 1960s - economic recovery

After the possibility of realising their more far-reaching political goals of the early post-war years became more and more unlikely, German unions started to concentrate their policy more on collective bargaining. Since the Collective Agreement Act of 1949 (DE9905200F) gave the unions a strong legal position in bargaining, the unions were able to achieve some remarkable progress from the mid-1950s onwards. In the field of wage policy, the unions succeeded in achieving significant increases in real pay, which ensured that the majority of employees could participate in Germany's economic recovery. Regarding working time, the unions successfully campaigned for reductions towards the 40-hour week and the introduction of a five-day working week with a free weekend. Finally, after a strike of 16 weeks in the metalworking industry, the unions obtained the introduction of remuneration in the event of sickness.

The overall economic recovery of the 1950s also strengthened trade union organisations. From 1950 to 1965, total membership of DGB's affiliates increased by more than 1 million from nearly 5.5 million to nearly 6.6 million (see annex). However, since the number of employees increased even faster, union density among DGB unions decreased from around 35% to less than 30%.

The changing political and economic framework conditions, as well as the change in trade union policy itself, led to the adoption of a new basic programme at the DGB congress inDüsseldorf in 1963. The new programme might be interpreted as a compromise between different political perceptions within the German labour movement. One wing within DGB argued that the unions should give up their socialist ideas and accept instead the new conditions of a "social market economy", implying a change from the "old class-struggle ideology" to the notion of "social partnership". In other words, parts of DGB wanted to follow the Social Democratic Party, which had already decided on its departure from socialism with its famous new party programme agreed at Bad Godesberg in 1959.

By contrast, there was still a strong wing within the DGB unions which continued to describe the German post-war order as a capitalist class society in which antagonistic interests between capital and labour had to be realised. According to this more leftist wing of the unions, the social progress in Germany's post-war era had been possible only because of the unions' capacity to act as an autonomous organisation, including the use of strikes and other industrial action. Furthermore, it was argued that developments in post-war Germany had led to the restoration of the old German capitalist class and had perpetuated a structurally unequal distribution of wealth.

At first sight it seemed that the left wing of the trade unions gained the majority, since all the main demands of the DGB 1949 basic programme - such as socialisation of key industries, national economic planning and economic democracy - were retained in the new programme. However, the 1963 programme started to drop the notion of an alternative non-capitalist society and, therefore, paved the way for a more pragmatic and cooperative trade union policy.

Mid-1960s to mid-1970s - social democratic reform

After a decade of the "economic miracle", Germany saw a "return of economic crisis" in the mid-1960s which led to a change in government from a conservative administration, first to a "grand coalition" of Christian and Social Democrats and then, from 1969, to a coalition of Social Democrats and Liberals. This change in government was accompanied by a shift in the dominant orientation of economic policy from liberalism to a new form of keynesian macroeconomic management.

In order to guarantee a stable macroeconomic coordination of fiscal, monetary and incomes policy, in 1967 the government established the so-called "concerted action" (Konzertierte Aktion), which was a new corporatist institution composed of representatives from the national and federal governments, employers' and business associations, trade unions and other important economic actors such as the Bundesbank. Since incomes policy was at the core of this new macroeconomic policy, it was one of the major tasks of the "concerted action" to convince the trade unions of a non-inflationary wage policy which corresponded with developments in productivity and abandoned traditional union demands for a redistribution from profit income to workers' income. To strengthen its influence on wage policy, the government started to publish annual target dates for the implementation of recommended wage increases.

Although the trade unions never officially accepted these governmental targets, there was de facto a high correspondence between the target figures and the actual wage increases in the first years of the policy. When economic recovery occurred in the late 1960s, however, the unions became less and less able to guarantee the support of their members for further participation in the macroeconomic incomes policy. After several "wildcat strikes" in 1969, where workers expressed their dissatisfaction with collectively agreed wage increases, the unions started to appeal for a more offensive pay policy. Subsequently, in the early 1970s, the unions obtained their highest wages increases in the whole post-war period. Annual wage increases were now much higher than the governmental recommendations and sometimes reached more than 10%. Despite the simultaneous existence of relatively high rates of inflation, these wage developments led to significant increases in real wages which were often above the increase in productivity and, therefore, involved a redistribution of profit to workers' income and a significant increase in the wage ratio (ie wage earners' income as a proportion of total national income).

Overall, the years from the mid-1960s to the mid-1970s could be seen as a period of growing trade union influence. A more offensive approach in union policy could be seen not only in the field of wage policy but also in other more "qualitative" aspects of collective bargaining policy. The unions started, for example, a broad campaign for a "humanisation of work" which involved a growing criticism of "tayloristic" work organisation and demanded a substantial improvement of working life. A further major success for the unions was the adoption of a new Co-Determination Act (Mitbestimmungsgesetz) in 1976. Although this new act did again not lead to an extension of the coal, iron and steel industry form of co-determination to the whole economy (as was still demanded by the unions), in comparison with the previous regulations it meant a substantial improvement of trade union co-determination rights. Finally, the success of trade union policy was also accompanied by further organisational strengthening. Between 1965 and 1975, the membership of DGB's affiliates increased from about 6.6 million to 7.4 million (see annex), accompanied by a slight increase in union density to around 32%.

Mid-1970s to the end of the 1980s - change from social democratic to neoliberal policies

Following the deep economic crisis of the mid-1970s, Germany entered a new period characterised by a continued decline of economic growth rates and a sharp increase in unemployment. In addition, the country's dominant economic policy was changed from keynesianism towards a more monetarist and supply-side oriented approach. While the emergence of this new political and economic perception had already started under the Social Democratic government, it strengthened and became an explicit political project, aimed at a move to neoliberal policies, when the new conservative-liberal government coalition came into power in the early 1980s.

In view of these new political and economic framework conditions, the unions took a more and more defensive political position. This became most obvious in the field of wage policy, where the pressure of growing unemployment pushed the unions to accept relatively moderate wage increases. With a very few exceptions, annual increases in real wages were below the increase in productivity from the mid-1970s onwards, thus leading to significant redistribution from workers' to profit income and a steady decline of the wage ratio.

The negative developments in wages - from a union perspective - could be partly compensated through a more offensive working time policy. The unions thereby succeeded in achieving further working time reductions and in some sectors they won a breakthrough in the direction of the 35-hour week. In exchange, however, they had to accept a significant flexibilisation in the individual duration and arrangement of weekly working time.

When the conservative and liberal parties returned to government in 1982, there was great concern among the unions that the new political power relations would lead to a more fundamental change in Germany's social order, including a substantial weakening of the unions' political position. Besides various cuts in social welfare contributions, the new conservative government presented, in particular, two legal projects which aroused strong resistance from the unions. The first was the Improvement of Employment Opportunities Act (Beschäftigungsförderungsgesetz) of 1985, which aimed at significant deregulation of the labour market, essentially making it easier to use "atypical" work (part-time work, fixed-term employment etc). The second was an amendment to Article 116 of the Employment Promotion Act (Arbeitsförderungsgesetz) in 1986, which abolished the opportunity for locked-out workers to receive a supplementary allowance from the Federal Employment Service (Bundesanstalt für Arbeit). The unions saw this law as a significant attack on their ability to organise strikes.

Despite its original political intention to undertake a more fundamental U-turn in economic policy, the German version of neoliberalism never achieved the radicalism of its British counterpart. In comparison with many other European countries, the "German model" of capitalism seemed to be relatively stable during the 1980s. Although there had been some political weakening of the German trade unions, in comparison with their counterparts in many other countries they remained remarkably strong. Union membership was relatively stable during the 1980s, with a slight decrease in the first half of the decade and a slight rise in the second half.

In terms of programmatic and political developments, DGB again adopted a new basic programme in 1981, reflecting both the social democratic reform period of the mid-1960s to mid-1970s, as well as the clear signs of crisis which were apparent from the mid-1970s onwards. While on the one hand the new programme confirmed the unions' support for Germany's political order as a pluralist parliamentary democracy, on the other hand it insisted on the fact that the German Constitution- the Basic Law (Grundgesetz) - does not prescribe a particular economic order. Since the 1981 DGB basic programme defined the role of trade unions in terms of the "contradictory interests between capital and labour", it confirmed some of the core demands of the earlier programmes, such as the socialisation of key industries or the democratic control of private capital. In addition, the new basic programme contained a broad range of new topics which had been raised during the 1970s, such as "humanisation of work", new technologies, vocational training, health and safety and the growing importance of environmental protection. One core element of the new programme, however, was the fight against unemployment and the reintroduction of full employment.

After unification - DGB trade unions in the 1990s

German unification in 1990 probably marked the most crucial turning-point in Germany's post-war history and had a significant influence on the overall political, social and economic order of German capitalism. After a short "unification boom," in 1992-3 Germany went into its deepest recession since 1945. As a consequence, unemployment figures reached one new record high level after another. From 1992 to 1998, the number of officially registered unemployed people grew from around 3 million to 4.3 million, equivalent to an increase in the rate of unemployment from 8.5% to 12.3%.

In eastern Germany, developments were particularly dramatic as the rate of unemployment grew from almost full employment in 1989 up to 14.8% in 1992, as a result of a widespread crash in east German industry. Although there was a slight recovery in the mid-1990s, the unemployment rate continued to grow, reaching 19.5% in 1998. Since eastern Germany was going through a continuous transformation crisis it depended heavily on transfer payments from the west. This, however, became a major cause of Germany's large state deficits and therefore contributed to the dominance of austerity policies during the 1990s.

Against this background, the political framework conditions for trade unions became even more difficult. As the whole west German system of industrial relations was transferred to the east, the unions also started to build up new organisations in the east or, as in the case of the chemicals industry, took over the old FDGB sectoral organisations. As a result, DGB membership grew from 7.9 million in 1990 to 11.8 million in 1991.

Shortly afterwards, however, the unions came to realise that the deep crisis of transformation prevented a simple transfer to the east of the west German industrial relations system. This was especially true for the collective bargaining system. It was not only the case that bargaining coverage in eastern Germany never reached the levels of the west, but also that some east German sectors saw a dramatic decline in coverage during the 1990s (DE9902196F). Furthermore, eastern Germany became a kind of pioneer in the flexibilisation of the German branch-level bargaining system, for example through the introduction of "hardship clauses" (DE9703205F), allowing firms with economic problems to pay their employees below the minimum wage set by the sectoral collective agreement .

The developments in eastern Germany were not without effects in the west. As the economic situation in Germany during the 1990s showed no substantial improvements, neoliberal positions became more and more prominent, accusing the "over-regulated" labour market and, in particular, the "static" and "inflexible" German bargaining system of preventing the creation of new employment. A majority of German employers therefore started to press for a significant flexibilisation and decentralisation of the bargaining system, while some even called for a fundamental change of the system from branch-level to company bargaining.

Developments in German bargaining in the 1990s did indeed lead to a far-reaching decentralisation, for example through the widespread introduction of "opening clauses", allowing for companies to diverge, in certain circumstances, from the provisions of sectoral agreements (DE9709229F). Against the background of persistently high unemployment, collective bargaining increasingly took on the character of "concession bargaining", whereby the unions had to make concessions on the content and the structure of collective agreements in exchange for an often relatively vague hope of maintaining employment. The increasingly weakened position of the unions was also expressed in the results of bargaining. Regarding working time reductions, the 1990s became almost a decade of stagnation, while in wage policy the path of wage restraint and declining wage ratios was followed.

With the aim of escaping from this defensive position, in late 1995 the unions took a major political initiative in proposing the creation of a national "Alliance for Jobs" in which trade unions, employers' organisations and the state should develop joint concepts to fight unemployment. This first attempt at a national social pact, however, failed after only a few months when the conservative-liberal government presented a "package of cuts" (Sparpaket) containing numerous far-reaching measures in the areas of social policy and labour law - for example, a reduction of remuneration during sickness from 100% to 80% of normal pay, and a relaxation in dismissals regulations.

At the end of the 1990s, however, there were some clear indications that the neoliberal mainstream in German politics had reached its limits. After a new "red-green" coalition of the Social Democrats and the Green Party came to power in September 1998 (DE9811281F), there were high hopes within the unions of a new political era which would give more priority to union demands. Initially there seemed to be some support for such expectations: the new government revoked some of the social policy and labour law initiatives of its conservative predecessor (DE9901291N), a new national "Alliance for Jobs" was established (DE9812286N) and the 1999 bargaining round saw a slight trade union offensive on wage policy (DE9907210F). However, since the new "red-green" government presented its own "package of cuts" in spring 1999 (which once again suggests a switch to a strong austerity policy, including cuts in the growth of social welfare contributions) many questions have been raised among unions as to whether or not the policy of Germany's Social Democrats is not little more than a "soft version" of neoliberalism.

At the turn of the millennium - German unions in a deep crisis?

During the commemorations of DGB's 50th anniversary, there was much talk about a "deep crisis" of German trade unionism. The most obvious sign of such a crisis has been the sharp decline in union membership during the 1990s. From 1991 to 1998, DGB membership fell around 30% from 11.8 million to 8.3 million (DE9908113F). The most dramatic membership losses have been in eastern Germany, where since 1991 the number of DGB members has declined on average by around 11.7% per year, in comparison with 2.1% per year in the west.

The organisational problems of the German unions become even more obvious when the structure of DGB membership is considered. At the end of 1997, for example, nearly 19% of DGB members were pensioners, while the proportion of young trade union members under the age of 25 decreased from 11.3% in 1991 to 6.4% in 1996. While DGB is still relatively strong in organising male full-time blue-collar workers in manufacturing and public services, unions have considerable problems organising female, white-collar and part-time workers, as well as workers in private industries. In short, the membership structure of the DGB corresponds more with the industrial society of the 1960s than with the service society of the 1990s.

The reasons for this dramatic drop in DGB's membership are manifold. There are many structural reasons - such as high unemployment, the growing importance of private services, changes in the nature of work and German unification - which together seem to be undermining the foundations of the traditional structure of German capitalism. However, the "organisational crisis" of the DGB unions is also an expression of a more "political crisis," since the unions seem to lack convincing ideas of how to deal with these structural developments.

In recent years, German unions have produced both programmatic and organisational changes aimed at a political restrengthening of the unions. In 1996, DGB adopted a new basic programme which aimed to redefine its principal positions regarding the new political, economic and social developments of the 1990s. At the core of its new basic programme, DGB demands a "socially regulated market economy" instead of "unbridled capitalism". Since DGB has given up its earlier demands for the socialisation of certain industries, the new programme has been widely interpreted as the DGB's final acceptance of a capitalist market economy. After controversial debates within the unions, however, the programme continues to refer to "conflicts of interests between capital and labour", while it also recognises for the first time other conflicts, such as "conflicts between sexes, the clash between economic development and ecological renewal and the conflict between increasing globalisation and a narrow ethnic or nationalist perspective." Regarding the future of the unions, the new programme calls for a new "organisational culture" which recognises "greater individuality and diversity of interests" within the unions, in order to make them more attractive for new groups of employees.

Besides this programmatic renewal, the unions have started a organisational restructuring which has led to a wave of trade union mergers in the late 1990s (DE9710233F). When in 2001 five unions create a new Unified Service Sector Union (Vereinigte Dienstleistungsgewerkschaft, VERDI) (DE9911225F), there will be only eight unions left from the original 16 DGB affiliates. There are at least two reasons for this development. First, membership losses have created growing organisational and financial problems, in particular for smaller unions which hope to obtain better representation of their members within a larger organisation. Second, the ongoing structural changes in the economy have broken down the traditional sectoral demarcations and thus brought into question the old concept of industrial trade unionism.

Commentary

There has been an overwhelming public consensus in Germany that DGB and its affiliates played a major role in developing the "German model" of post-war capitalism - a relatively successful combination of economic strength and social welfare. For the future, however, the role of German trade unions seems by no means clear. Since the 1980s, the "German model" has increasingly been confronted by various fundamental challenges, such as: the structural shift from an industrial to a service economy; growing internationalisation; new forms of work organisation; growing unemployment; social polarisation; and the emergence of neoliberalism as the dominant ideology. In addition, in 1990 German unification presented a further extraordinary challenge for Germany's traditional economic and social order. Altogether, these and other developments have led to a significant diminishing of the unions' power, which has found its most obvious expression in a sharp decline of membership during the 1990s.

There is a broad consensus within the German unions that further organisational and programmatic modernisation is necessary in order to reinforce their position. The content and aim of this modernisation process is, however, still heavily disputed. There are some who argue that unions should become more like service companies, providing more professional and extensive services for their members. Others claim that the unions need to become more political organisations, since the old division of labour between the Social Democratic Party and trade unions has almost disappeared.

As the debate over the" right way" forwards for trade union modernisation continues, there seem to be substantial consensus that trade union organisations must become genuinely "Europeanised". In his main speech at the 50th anniversary ceremony the DGB president, Dieter Schulte, made the following forecast: "German trade unions will celebrate their 100th anniversary not on their own but together with unions from all over Europe ... united in a European trade union organisation that is strong and capable of action." (Thorsten Schulten, Institute for Economic and Social Research (WSI))

Annex