The Role of the German Federation of
Trade Unions in the Welfare-to-WorkReform Process
Michaela Schulze
Frankfurt University
Reforming Unemployment Policy in Europe: A Common
Turn towards Activation?
May 15-16, 2009
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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
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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
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 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?
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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)
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 Some Criteria:
…
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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
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
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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 duties
 Schröder-Blair Paper (1999) - idea of activation
 German discussion was inspired by early American
reform in 1996 and Anthony Giddens
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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:
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 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“
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 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
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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
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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
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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)
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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!!!)
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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
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 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!

-
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DGB opposed the Hartz IV-reform:
also involved here
but government did not introduce the proposals of the commission
instead harsher rules
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
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