1

The Role of the German Federation of Trade Unions in the Welfare-to-Work-

Reform Process

Michaela SchulzeFrankfurt University

Reforming Unemployment Policy in Europe: A Common Turn towards Activation?

May 15-16, 2009

2

Table of Contents

1. Introduction

2. Theoretical Approaches and the Frame

3. The DGB and Welfare-to-Work-Paradigm

4. The DGB and the Welfare-to-Work-Reforms

5. Conclusion

3

1. Introduction

trade unions and welfare state reform

German Federation of the Trade Unions influenced welfare state development:-esp. after Second World War -but also during the development of major welfare state programs (end of the 19th and first half of the 20th century)- fought for extensive programs (e.g. unemployment insurance)

new challenges since the 1980s:-welfare state is under reform pressure-trade unions are under pressure, too

It is important to look for the role trade unions played in the welfare-to-work reform process

- Did they support or oppose the emerging welfare-to-work paradigm?

- How did they influence the reform process?

Why to look for the German Federation of Trade Unions?- Umbrella organization and a political actor- Social policy interests of the trade union movement - (comparability)

Is welfare-to-work important for trade unions?- these reforms affect programs that are of interest for trade unions - e.g. unemployment insurance, social assistance schemes

“golden age” of welfare state development:- trade unions as an important political actor what about welfare state retrenchment?

4

2. Theoretical Approaches

Two dominant directions have to be considered:

- trade union research- welfare state research

welfare state development within the new context - retrenchment… (e.g. Pierson)- activation/workfare/welfare-to-work discussion (e.g. Peck, Quaid,

Shragge, Lødemel/Trickey, Drøpping/Hvinden/Vik , Barbier…)

power resources approach (Korpi) corporatism (Schmitter, Lehmbruch, Streeck)

5

Some Criteria:

- Political aims of the trade union movement- Access to the political (reform) process- Influence in commission work - Ties to the social-democratic party- Strength of the movement…

6

3. The DGB and Welfare-to-Work-Paradigm

Emergence of the welfare-to-work paradigm in Germany

1998-2001- Time between the election campaign and the Job-AQTIV Law - Welfare-to-work paradigm emerged

The position of the DGB during this paradigm shift:- opposition of welfare-to-work paradigm- and hope for social-democratic government and trade union- friendly

social policy

7

8

Emerging Welfare-to-Work Paradigm in Germany (1998-2001): „German problems“ (defined by politicians & scientists):- long-term unemployment- insufficient incentives to take a job, lack of qualifications- ineffective administration

1998: election campaign of the Social Democratic Party - Bodo Hombach (Federal Minister of the Chancellery)

called for reforms - Fördern und Fordern was the main slogan - individual initiatives to take a job, re-balancing rights

and dutiesSchröder-Blair Paper (1999) - idea of activationGerman discussion was inspired by early American

reform in 1996 and Anthony Giddens

The DGB and welfare-to-work paradigm change:

Difficult situation for trade unions- social policy cuts of the Kohl-administration - development of membership

Gerhard Schröder (election campaign)- he promised to take back the last cuts of the Kohl-administration- he also promised a new try for the „Bündnis für Arbeit“ (Alliance for

Jobs)- unemployment was the major topic

trade unions supported the campaign in content and with money- because of the promises Schröder made the DGB hoped for:- trade union-friendly social policy

BUT:

9

within the trade union movement no clear direction about future social policy and about the involvement of the DGB as a political actor!

This is also obvious from the discussion of the Schröder-Blair-Paper- content and reform proposals were criticized - „ a danger for the German welfare state“

denial of „fördern und fordern“

new welfare-to-work paradigm was seen as a synonym for anti-trade union social policy

problem definition (unemployment, lack of qualifications…)- DGB agreed (unemployment as the major problem)- DGB in favor for further education and training- but opposed the „laziness discussion“

10

the position of the DGB can be characterized as:- support for Schröder, because they hoped for „good“

social policy- opposition of the new paradigm

opinion of trade union leaders changed with the victory of Schröder- he demonstrated his plans about future social policy

on the other hand it is not surprising that the DGB opposed the paradigm because it is a threat to (traditional) social policy goals of trade unions

11

4. The DGB and the Welfare-to-Work Reforms

From welfare-to-work paradigm to welfare-to-work reforms

2001-2005 - two major reform steps- Job-AQTIV Law and the Hartz reforms

The DGB during the reform process- policymaker and disappointed political actor

12

13

Welfare-to-Work Reforms in Germany (2001/2-2005)

2 major reform steps:

Job-AQTIV Law (2001)- main elements: activation, qualification, training,

investment, job placement- aims: improving job service, active integration of the

unemployed, education and training for unskilled workers

- slogan of “Fördern und Fordern” established

14

Welfare-to-Work Reforms in Germany (2001/2-2005)

Hartz Reforms (2003-2005)

- Hartz 1 – Hartz 3: - reforming and improving job service, - reducing bureaucracy, - job placement as “service for clients”, - self-employment for unemployed was fostered, - possibilities of sanctioning unemployed were expanded

- Hartz 4: final step towards welfare-to-work policies, - unemployment benefits were reduced to 12 months, - unemployment benefit II (replaced former unemployment

assistance and social assistance for able-bodied persons), - people who do not take an appropriate job will lose their

benefits,- creation of job centers (to end former double responsibility)

The DGB and the welfare-to-work reform process:

„Alliance for Jobs“ (Bündnis für Arbeit) re-established after the election to find solutions for the problem of

unemployment - trade unions, politicians, employers involved - between 1998 and 2002: 8 meetings- agreements about major reforms but not about the content- trade unions declared the failure of the alliance in 2002

Year 2000 shift in policy strategy of the DGB- (opposition of welfare-to-work ideas)- since then the DGB was in favor of (a strong) activation- called for reforms (some of the topics of the later Hartz reforms!!!)

15

Job-AQTIV law (2001): the DGB was in favor of the reform - right elements for integration to the labor market- for a strong emphasis on activation- major topics have been discussed in the meetings of the „Bündnis für

Arbeit“

Not surprising, because they were involved in the making of the reform!!!

Hartz reforms (2002/2003-2005)

in favor of the reform proposals made by the Hartz commission but opposition of real reforms made by the government- because they differed from the proposals made by the commission! esp. the Hartz IV reform was heavily criticized - unemployment benefit II (like social assistance, not enough to live)- duty to accept nearly every job

16

DGB was in favor for welfare-to-work ideas - involvement in the work on reform proposals- shift from opposition to support for welfare-to-work!

DGB opposed the Hartz IV-reform:- also involved here- but government did not introduce the proposals of the commission- instead harsher rules

17

5. Conclusion: Is the DGB still an important political actor? Political aims of the trade union movement- shifted from opposition to support of welfare-to-work ideas - (but relatively late, because disputes about future direction of the

movement)

Access to the reform process and commission work:- Bündnis für Arbeit, Hartz commission, trade union members in the

parliament etc. - but: Schröder did not implement the proposals (in case of the Hartz IV-

reform)- further weakening of the movement

( ties to the social-democratic party and strength of the movement)

To conclude: The DGB still is an important political actor in the reform process but: some of the problems appear because of problems within the movement

18