1 The Role of the German Federation of Trade Unions in the Welfare-to-Work- Reform Process Michaela Schulze Frankfurt 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 19 th and first half of the 20 th 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 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 ( ):  „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

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 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 ( ) -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/ )  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