Trade Unions: The Difficult Path to Solidarity in One’s Own Interest
By Steffen Lehndorff
In both the ideals and the rhetoric of trade unions international solidarity plays a major role. Trade union practice, however, is first and foremost focused on the context of those nation-states, in which they were able to achieve their most important victories in the 20th century. It is those achievements within the national framework which are being undermined with the help of the EU and its institutions (Wickham 2012). Since 2010 the most radical programme of austerity in the entire history of the EU has been imposed on the crisis-ridden countries in the name of Europe. For the time being the trade unions and the masses of their members in Germany and the group of the other so-called ‘core countries’ of the (by now shrinking) Eurozone, particularly in Northern Europe, could have the impression of living in another world. Conflicts around trade union policy are becomming more differertiated among the differnt countries. Yet, the policy of fighting the crisis in the EU, which at the same time increasingly exacerbates it, confronts traditional models of trade unionist policy with its limits defined by the nation state.
From the great recession to the great aggression
While in the first stage of the current crisis, i.e. the ‘Great Recession’ of 2008/2009, most European governments had resorted to active crisis-management measures, in the second phase, the intensified crisis of the Euro system since 2010, governments adopted a policy which aggravated the crisis. Largely on the initiative of the German government, elaborated by the EU Commission and in coordination with the IMF in the framework of the Troika, an authoritarian interventionism was established, which is putting massive cuts of state expenditure and further deregulation of the product and job markets at the centre of a new economic and political management (Bieling 2012; Leschke et al. 2012). It is based on a concept comprising the entire range of the standard neoliberal programme of ‘structural reforms’ and deals in no way with the dramatic need for reform, in particular in the countries on the periphery (see the analyses of countries in Bosch et al. 2009 and Lehndorff 2012).
Those ‘employment-friendly labour market reforms’ (European Commission 2012) are primarily implemented in the countries on the Euro-periphery, notably in Greece and Spain (for surveys see Clauwaert/Schönmann 2012; Hermann et al. 2012). Thus, following the requirements of the Troika, the Greek government has enforced the general privilege of company-level agreements over centralised sector-level agreements. In companies without any trade union representation, company agreements can also be concluded with ‘other groups of employees’. In addition, all procedures involved in the declarations of general application of collective agreements have been suspended. Also, in 2012 the statutory minimum wage based on a national wage agreement was cut by 22 % (for those under 25 years of age by 31 %). In so doing the government has overturned the previously practiced negotiation of the minimum wage between the central collective bargaining parties and removed one of the most important pillars allowing trade unions to influence general minimum standards up to now.
The dismantling of the systems of collective agreement and interest representation in Spain also includes the general privileging of company agreements over centralised agreements. In addition, employers are allowed unilaterally to ‘opt out’ of the minimum standards of the centralised agreements if there have been losses for two quarters. If no agreement can be reached on the application or change of collective agreements, forced arbitration is introduced through the Ministry of Labour with the involvement of a trilateral commission. Employers can now terminate employees without prior consultation with the representatives of the employees’ interests. This combination of relaxing the rules on protection against dismissal and curbing the power of the works councils has deprived the trade unions of crucial areas of its influence.
In both countries the trade unions are not only losing fundamental institutional power resources but also their traditionally strongest political allies. Most social democratic parties have from 2010 become so enmeshed in implementing the dictates of the Troika that they have manoeuvred themselves politically out of the running (without more radically left parties gaining ground anywhere with the exception of Greece). This increasingly forces trade unions to depend on their own potential: their organisational strength, their ability to call strikes and their political ability to mobilise and build alliances. To a certain degree they have been able to do so: Of the 118 general strikes that have taken place in Western Europe between 1980 and 2011, 24 have occurred just in the years 2010 and 2011 (Hamann et al. 2012). Yet, for the most part in contrast to their previous experience, trade unions are now increasingly coming up against a brick wall. Starting in 2012 at the latest these general strikes have partly had the effect of being impotent protests no matter how high the participation rate and how strong public sympathy is.
Thus the trade unions find themselves in new and unfamiliar company. The mass protests in Spain, Greece and the other crisis-ridden countries were essentially – at least in the beginning – distant from the trade unions. Of all the groups of employees, the young, who in Spain and in Greece are hit hardest by the crisis, have the weakest ties to trade union organisations. The trade unions, as Hyman (2007, 206) had already presumed before the outbreak of the crisis, found themselves to be ‘outsiders in a terrain where until recently they had been assigned the comforting and rewarding role of insider’. Now they have to seek ‘often uneasy cooperation with other social movements that have never acquired the respectability gained by trade unions in most countries.’
The sleeping giant?
It is possible to grow into this kind of unfamiliar role only slowly. This happens, for example, to the extent that trade union members get involved as individuals in neighbourhood movements where they (can) act as little as representatives of an organisation as can members of any other social organisation or party (Fernández Steinko 2011). Equally unfamiliar is involvement in areas such as the educational and health systems, which have up to now not been bastions of trade union influence. There, however, big protests are developing as a response to the austerity measures. These protests do not just consist of classic industrial actions but are organised as part of broader social movements. Yet, as a consequence of the widespread feeling that employees of the public sector are privileged, divides have to be overcome here too (Muñoz de Bustillo/Antón 2012).
Trade union members in Germany may well have the impression that they are living in another world. Yet the pendulum is swinging back.
From a Greek or Spanish perspective the German trade unions convey an image of strength. This is only partly due to their size. In the decade before the crisis, the degree of trade unionisation in Germany dropped by about 10 per cent to 19 per cent – more than in almost all other Western European countries. Only in very recent years have industrial trade unions succeeded in slowing down or stopping membership decline. The impression of strength is really based on the role trade unions play in the German institutional system, which seems to give them a political influence going far beyond their actual organisational power. Yet these possibilities of exerting influence within the institutions have greatly diminished since the 1990s.
This can be observed in a particularly impressive way by studying the development of wages. Starting in the 1950s (West) German industrial trade unions never link their wage demands to productivity increases in the industries, but to the growth of the entire economy, in order to avoid the continuous widening of wage gaps between the sectors. As a consequence of ‘pattern bargaining’ wage increases were aimed at in economic sectors which lay above the rate of productivity increase in those specific sectors. In order for this to work, there had to be additional mechanisms to redistribute from sectors with a high rate of increase in productivity to those with a lower rate; in this the taxation system played a major role, in particular for the public services sector. This redistributive framework was operative well into the 1990s – since then it has been dismantled step by step.
This process had many facets: shrinking collective bargaining coverage, numerous local departures from centralised collective agreements due to pressures from outsourcing and relocation, far-reaching abandonment of a system of declarations of general application for collective agreements, privatisation of public services, substantial reduction of tax revenues by relieving higher incomes and income from capital, deregulation of temporary work, the encouraging of mini-jobs, the weakening of unemployment insurance, pressure exerted on the unemployed to accept job offers with disadvantageous terms, de-facto introduction of a combined wage for low wage earners (state subsidies to support very low or poverty-level jobs taken by the unemployed) – thus many of the institutions which brought about a degree of social equality and redistribution, quite impressive under capitalist conditions, were seriously damaged and partly destroyed. As a consequence, Germany today has one of the biggest low-wage sectors of all Euro-countries and is the only EU-country in which average wages during the 2004-2008 economic growth phase did not rise but fell. The trade union wage policies, which were exposed to the all-pervasive political and medial headwind of the ‘debate on Germany’s national competitive position in the world’, certainly played a role in this damage. But if between 2000 and 2012 the increase of the average real negotiated wages lay 5.5 per cent below the rise of productivity for each employee, and the average real wage per employee had decreased by a further 9.3 per cent, this signals that the lion’s share of the negative wage development is a result of the dismantling of labour market institutions.
It was particularly as a result of Agenda 2010 that German trade unions were deprived of a significant part of their institutional power resources. Important elements from the EU’s catalogue of ‘employment-friendly labour market reforms’ have been enforced against the, at times, highly impressive, yet politically powerless protest of the trade unions.
From a European political perspective, this power shift had a remarkable consequence. Before the Eurozone was created, the fear was occasionally expressed that within the currency union jobs could be endangered in one country due to wage dumping in others, because wage policy would then become the only remaining macro-economic regulating screw for influencing price competitiveness. These allegations have been substantiated, yet in a way entirely different from what was imagined, because the ‘social dumping’ had its starting point in Germany. Today, and with low social standards to begin with, the countries on the periphery are forced to imitate the German path and even considerably to exacerbate the course taken.
Thus the defeats of the German trade unions up to the mid-2000s and the considerable weakening of their institutional influence have become the problem of trade unions in the other Euro-countries. This triggered a race to the bottom in dismantling institutions with social balancing functions, a development which will sooner boomerang on the German trade unions and their possibilities of exerting influence in the institutional framework.
Outlook: European solidarity as a defence of one’s own interests
The countries of the Euro are drifting apart dramatically both socially and in terms of their economies. Also the gap between the sets of problem trade unions are facing in individual countries is huge and, realistically speaking, broad cross-country solidarity movements are hardly imaginable at present (which does not mean that attempts at developing them are superfluous). It is obvious that a basic change of direction, to bring to a halt or even reverse this process of drifting apart, is needed, and is possible, on the EU-level in particular. In view of the attempts by the EU-Commission to draw the trade unions – for example, in the framework of a ‘trilateral exchange of opinions about the development of wages’ – into its destructive policy of ‘structural reforms’, the challenge to the trade unions is to take a more oppositional stance at this level too, and in fact they are tending to do so (Janssen 2012). However, this does not solve the problem of how they can bridge the gap between this level of politics and their respective national fields of conflicts.
It is the conditions themselves which force the national trade union organisations to develop a European policy as part of their respective ‘domestic policies’. The crisis management exacerbating the crisis turns the weakness of the ones into a problem of the others and can drive all of them toward marginalisation – some sooner, some later. This is crucial for the development of European trade union solidarity. If up to now the dominant impression was that the working people in Germany (as well as in the Netherlands, Austria or Northern Europe) were not immediately affected by the spreading social misery in the South, the pendulum is now beginning to swing back. In policy papers such as ver.di’s Manifesto for a European Policy, IG-Metall’s Setting the Course towards a Europe of Solidarity and the German Trade Union Federation’s Marshall Plan for Europe the reciprocal effects have already been identified and alternatives proposed. So far nobody knows yet what relevance these programmes can have for the practical activity of the unions and how the gap between them and the daily practice of the unions can be bridged.
Despite national differences, the challenges are surprisingly similar in all the countries. The trade unions always have to struggle first against the crisis-management policy on a national level. This also holds true for Germany. The boomerang the government in Berlin is throwing at the countries hit by the crisis will very soon land on the toes of German employees in the shape of increasing wage competition – unless this is counteracted by a new regulation of the labour market in Germany. And the painful effects of the debt brake and Fiscal Pact will in the years to come be increasingly evident also in Germany, on the municipal level in particular, so that active redistributive policy via tax reforms will move to the very top of the political agenda.
In this setting, the political autonomy of trade unions is required. This means going beyond the mere defence of earlier achievements and developing independent alternatives, not in order to replace political parties but out of the insight that the parties have to be pushed into taking the ideas of the trade unions into account. It is the role of a ‘constructive veto player’ (Urban 2012), which does not necessarily belong to the tradition of the Southern European trade unions. The German trade unions are certainly quite used to the constructive aspect of this approach but are less familiar with political mobilisation for a veto than are their Southern European sister organisations.
In recent years German trade unions have criticised the system more sharply than they had previously done, and they have presented important reflections on new urgently required political changes of direction. Tackling the doubtless difficult task of mobilising for a big redistribution initiative and a new labour-market order would be a further radical step: from criticism of the system to the practice of constructive criticism of government.
In other European countries trade union members will immediately understand what this has to do with their own working and living conditions and with Europe. The German trade unions must not be silent with their members regarding this link. A different course in Germany would let all the others breathe more fresh air. For the time being, political changes in Europe will be brought about or promoted by changes in individual member states. And that is why for good reason all eyes are on Germany. Social reforms in Germany are not everything for Europe, but without them there will be nothing.
Note
This contribution is a considerably shortened version of my article ‘Verschiedene Welten? Gewerkschaften in der europäischen Krise’ (“Different Worlds? Trade Unions in the European Crisis”), which was published in the journal Das Argument in May 2013. Therefore most of the original references are not included here.
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This article first appeared in transform! journal, Issue 12, 2013