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Helena Bach / Hagen Lesch / Sandra Vogel IW-Analyse No. 148 31. March 2022 The Legitimacy of Free Collective Bargaining in Germany: Economic policy lessons from historical debates from 1918 to the present

Since the signing of the Stinnes-Legien Agreement in 1918, the collective bargaining autonomy of Germany’s employers’ associations and trade unions has been the subject of continual political debate and at times its legitimacy even called into question.

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Economic policy lessons from historical debates from 1918 to the present
Helena Bach / Hagen Lesch / Sandra Vogel IW-Analyse No. 148 31. March 2022

The Legitimacy of Free Collective Bargaining in Germany: Economic policy lessons from historical debates from 1918 to the present

German Economic Institute (IW) German Economic Institute (IW)

Since the signing of the Stinnes-Legien Agreement in 1918, the collective bargaining autonomy of Germany’s employers’ associations and trade unions has been the subject of continual political debate and at times its legitimacy even called into question.

An ongoing review of the freedom allowed to the two sides of industry to negotiate on their own terms and the extent to which it serves its purpose can thus be seen as inherent in the system. The debate over the years has focused on whether collective bargaining autonomy creates a just balance between the interests of employees and employers, serves the common good and is compatible with the macroeconomic objectives of the national government. The criteria for the review have varied according to the general economic situation and the political orientation of the government of the time. The present analysis of two fundamental and nine historical debates shows that state influence on collective bargaining autonomy is not without risk. It is true that adjustments to the framework conditions that ensure the functioning of free collective bargaining and regulate the cooperation between the two sides have proven helpful. Yet when the state intrudes too deeply in the competences of the bargaining parties, it fails to meet its aims. This observation needs to be given due weight in the current political debate on strengthening collective bargaining. If the government decides to enhance the effectiveness of the bargaining process, it should be done “from below”, by making membership of employers’ associations more attractive and thus safeguarding free collective bargaining as the collectively-exercised autonomy of private parties

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Economic policy lessons from historical debates from 1918 to the present
Helena Bach / Hagen Lesch / Sandra Vogel IW-Analyse No. 148 31. March 2022

The Legitimacy of Free Collective Bargaining in Germany: Economic policy lessons from historical debates from 1918 to the present

German Economic Institute (IW) German Economic Institute (IW)

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The Cost Competitiveness of German Industry in Times of Multiple Crises
Christoph Schröder IW-Trends No. 3 21. October 2022

The Cost Competitiveness of German Industry in Times of Multiple Crises

In 2021, German unit labour costs were an average of 13 per cent higher than in the 27 countries in our comparison and 8 per cent higher than in other countries in the Eurozone.

IW

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Hagen Lesch / Helena Schneider / Christoph Schröder IW-Analyse No. 145 20. October 2021

Minimum Wage Adjustment and a Living Wage in Germany

Germany’s Minimum Wage Act accords a Minimum Wage Commission the task of deciding on a biennial adjustment to the minimum wage. While including an overall assessment, their decision is to be oriented on the development of collective wages.

IW

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