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West European Labor in Transition: Sweden and Germany Compared

Published online by Cambridge University Press:  13 June 2011

Kathleen Thelen
Assistant Professor of Politics at Princeton University.


This article analyzes conflicts in the 1980s over the decentralization of bargaining between labor and capital in Sweden and Germany. The analysis highlights the role of institutional arrangements, some of them previously “dormant” politically, that mediated common pressures to enhance plant-level flexibility. Whereas the drive for plant flexibility in Sweden contributed to the demise of traditional bargaining arrangements, similar pressures in Germany were more successfully accommodated within its “dual” system. In both cases, institutional links among different levels and arenas of bargaining shaped the strategic interactions of labor and capital in ways that either complicated (Sweden) or facilitated (Germany) the search for compromise within traditional bargaining institutions. While confirming the central role of institutions in explaining cross-national variation in outcomes, the analysis also adds a dynamic element to institutional analysis, highlighting how changing substantive interests of political actors interact with preexisting institutions to produce distinctive patterns of stability and change.

Research Article
Copyright © Trustees of Princeton University 1993

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1 Piven, Frances Fox, ed., Labor Parties in Postindustrial Societies (New York: Oxford University Press, 1992).Google Scholar

2 Sengenberger, Werner, “West German Employment Policy: Restoring Worker Competition,” Industrial Relations 23 (Fall 1984).Google Scholar

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4 For an overview, see Harry C. katz, “The Decentralization of Collective Bargaining: A Literature Review and Comparative Analysis,” Industrial and Labor Rehtions Review (forthcoming).

5 For a broader cross-national framework for understanding contemporary labor politics that builds on an analysis ofcross-national differences in institutional and political starting points, see kathleen Thelen, “The Changing Character of Industrial Relations in Contemporary Europe” (Paper prepared for the workshop “A New Europe: Rethinking the Collective Response to Change,” Center for European Studies, Harvard University, December 11–13, 1992); also Richard Locke and kathleen Thelen, “The Shifting Boundaries of Labor Politics: New Directions for Comparative Research and Theory” (Paper presented at a work shop, also entitled “The Shifting Boundaries …,” Center for European Studies, Harvard University, March 12–14, 1993).

6 Within industries, bargaining in Germany is actually conducted at the regional level. However, on the most important issues the results are coordinated by the central union headquarters.

7 For this view, see especially Hohn, Hans-Willy, Von der Einheitsgewerkschaft zum Be triebssyndikalismus (From unitary trade unionism to plant syndicalism) (Berlin: Sigma Rainer Bohn Verlag, 1988).Google Scholar

8 Since German unification in 1990, a new set of East-West frictions has emerged. Among other things, these revolve around the question of how quickly wages and working conditions in the “five new states” (former East Germany) should be brought into line with those in the West. These East-West conflicts pose a new kind of challenge to the German system, and it is not yet clear whether they will be dealt with as successfully as decentralization was in the 1980s.

9 Sengenberger (fn. 2).

10 Lash, Scott, “The End of Neo-corporatism? The Breakdown of Centralised Bargaining in Sweden,” British Journal of Industrial Relations 23 (July 1985), 219.CrossRefGoogle Scholar Solidaristic wage bargaining in Sweden dates back to the 1930s and was originally premised on the principle of equal pay for equal work, regardless of a firm's situation in the market. This policy, and the “Rehn-Meidner” model from the 1950s of which it formed a part, set in motion a dynamic that forced less efficient firms to modernize. For a short explanation of the Rehn-Meidner model and of solidaristic wage policy, see Martin, Andrew, “The Dynamics of Change in a keynesian Political Economy: The Swedish Case and Its Implications,” in Crouch, Colin, ed., State and Economy in Contemporary Capitalism (New York: St. Martin's, 1979), 104–8.Google Scholar

11 The organization recently changed its name to Sveriges Verkstadsindustrier, or VI.

12 Interviews with representative of VI, Stockholm, 1992.

13 Jonas Pontusson and Peter Swenson, “Markets, Production, Institutions, and Politics: Why Swedish Employers Have Abandoned the Swedish Model” (Paper presented at the Eighth International Conference of Europeanists, Chicago, March 27–29, 1992). For other accounts of the breakdown of the Swedish model, see Martin, Andrew, “Wage Bargaining and Swedish Politics: The Political Implications of the End of Central Negotiations,” Minda de Gunzburg Center for European Studies Working Paper no. 36 (Cambridge: Harvard University, 1991)Google Scholar; Brulin, Göran and Nilsson, Tommy, “From Societal to Managerial Corporatism: New Forms of Work Organization as a Transformation Vehicle,” Economic and Industrial Democracy 12 (August 1991).Google Scholar

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15 Interview with Göte Larsson, head of Metall's collective bargaining department, and with Åke Nordlander, the then president of VF, both August 1992.

16 See especially Martin (fn. 13) for a chronology.

17 Swenson, Peter, “Bringing Capital Back In, or Social Democracy Reconsidered: Employer Power, Cross-Class Alliances, and Centralization of Industrial Relations in Denmark and Sweden,” World Politics 43 (July 1991).Google Scholar

18 Quoted in Martin, (fn. 13), 90.Google Scholar

19 Interviews with representatives of VI and ALMEGA (an employers' association covering several industries, including chemicals, mining, building materials, food, and leather), August 1992. The quote is from Göran Trogen, managing director of ALMEGA.

20 Göran Brulin, “Reintroduced Works Councils Activities but under Strong Trade Unionism: The New Swedish Model?” (Manuscript, Royal Institute of Technology and the Department of Business Administration and Management at the Stockholm University, n.d.), 32. Brulin is referring to views expressed in a book by SAF chairman Ulf Laurin.

21 Turner, Lowell, Democracy at Work (Ithaca, N.Y.: Cornell University Press, 1991)Google Scholar; Thelen, kathleen, Union of Parts: Labor Politics in Postwar Germany (Ithaca, N.Y.: Cornell University Press, 1991)Google Scholar; katzenstein, Peter J., ed., Industry and Politics in West Germany: Toward the Third Republic (Ithaca, N.Y.: Cornell University Press, 1989)Google Scholar; Wolfgang Streeck, “Successful Adjustment to Turbulent Markets: The Automobile Industry,” in katzenstein. There have been dissenting voices, of course, but most of these consider the main destabilizing factor to be the problems created by unification and not the more general cross-national trends stressed here. See, e.g., Mahnkopf, Birgit, “Vorwärts in die Vergangenheit? Pessimistische Spekulationen über die Zukunft der Gewerkschaften in der neuen Bundesrepublik,” in Busch, Ulrich et al., eds., Wirtschaftspolitische konsequenzen der deutschen Vereinigung (Frankfurt am Main: Campus Verlag, 1991).Google Scholar

22 For a full analysis of the strike, see Thelen (fn. 21), chap. 7.

23 For example, the 1984 contract reduced working times to 38.5 hours, but the number of hours actually worked each week could vary, so long as the total averaged out to 38.5 hours per week over the course of a two-month period.

24 On the trade-off between further work-time reduction and flexibility, see, for example, the remarks by Hans Peter Stihl, head of the metal working employers' association for Baden-Württemberg, in Handelsblatt, February 23, 1987.

25 kölner Stadt Anzeiger, June 12, 1987.

26 Interviews with representatives of the national employers' association for the metalworking industries (Gesamtmetall) and the association of metalworking employers in Berlin and Brandenburg, August 1992; see also Die Zeit, August 28, 1992, p. 21.

27 Interview with a member of the collective bargaining department of the BDA, August 1992.

28 Möllemann proposed legislation that would allow works councils and managers in the East to negotiate plant-level deviations from the collectively bargained industry agreements. My assessment of employers' reactions is based on interviews with representatives of Gesamtmetall, the BDA, and the metal employers in Berlin and Brandenburg. As one employer representative put it: “If there is going to be any such flexibilization [of contracts] for firms in the East, then this possibility should be established in the contracts themselves, and not through ministerial decree. It has to be done by the bargaining partners themselves.” On this proposal, see also Handelsblatt, September 15, 1992; and Die Zeit, July 3, 1992, p. 21.

29 Thelen (fn. 21), chap. 2.

30 katzenstein, Peter J., Policy and Politics in West Germany: The Growth of a Semisovereign State (Philadelphia: Temple University Press, 1987)Google Scholar, esp. chap. 1.

31 The Rehnberg Commission, named after the former head of the Labor Market Board, presided over the 1991 and 1992 wage rounds.

32 The legislation deprived worKers who were laid off because of striKe-related parts shortages of the right to apply for unemployment benefits.

33 For example, Silvia, Stephen, “The West German Labor Law Controversy: A Struggle for the Factory of the Future,” Comparative Politics 20 (January 1988).Google Scholar

34 On Germany, see especially StreecK (fn. 21). On Sweden, see the large literature on democratic corporatism, especially Katzenstein, Peter J., Small States in World Martlets (Ithaca, N.Y.: Cornell University Press, 1984)Google Scholar; Cameron, David, “Social Democracy, Corporatism, Labour Quiescence, and the Representation of Economic Interest in Advanced Capitalist Society,” in Goldthorpe, John H., ed., Order and Conflict in Contemporary Capitalism (Oxford: Oxford University Press, 1984)Google Scholar; Lange, Peter and Garrett, Geoffrey, “The Politics of Growth: Strategic Interaction and Economic Performance in the Advanced Industrial Democracies, 1974–1980,” journal of Politics 47 (August 1985).Google Scholar

35 Swenson, Peter, Fair Shares: Unions, Pay, and Politics in Sweden and West Germany (Ithaca, N.Y.: Cornell University Press, 1989).Google Scholar

36 See also Pontusson, and Swenson, (fn. 13), 45.Google Scholar

37 Martin, (fn. 13), 41.Google Scholar

38 Handelsbhtt, May 8, 1990; see also Thelen, (fn. 21), 177–78.Google Scholar

39 See especially Swenson (fnn. 35 and 17) on the importance of employer organization and strategies.

40 Pontusson and Swenson (fn. 13).

41 On the Swedish case, see Swenson, Peter, “Labor and the Limits of the Welfare State: The Politics of Intraclass Conflict and Cross-Class Alliances in Sweden and West Germany,” Comparative Politics 23 (July 1991).Google Scholar In Germany, the main public sector union (GewerKschaft Öffentliche Dienste, Transport und Verkehr, or ÖTV) generally follows the metalworkers' lead in terms of percentage increases, but the contracts do not promote wage leveling between the two. Moreover, some public sector workers in Germany (tenured civil servants) do not have the right to strike or even bargain collectively.

42 The rival white-collar confederation in Germany (Deutsche Angestellten Gewerkschaft, or DAG) organizes less than one-fourth of all unionized white-collar workers. The rest are members of DGB unions. See Markovits, Andrei S., The Politics of the West German Trade Unions (New York: Cambridge University Press, 1986), 11.Google Scholar

43 Pontusson, and Swenson, (fn. 13), 3233Google Scholar; Lash, (fn. 10), 222Google Scholar; Rianne Mahon, “[Lonetagare] and [Medarbetare]? The Swedish Unions Confront the [Double Shift]” (Paper presented at workshop on “The Changing Place of Labor in European Society: The End of Labor's Century?” Center for European Studies, Harvard University, November 23–24, 1991), 21–22; and Brulin and Nilsson (fn. 13).

44 Mahon, (fn. 43), 1011.Google Scholar

45 Martin, (fn. 13), 36.Google Scholar


47 Lash, (fn. 10), 222.Google Scholar

48 Another reason is the much lower overall level of unionization among white-collar workers in Germany. In Sweden over 70$ of white-collar workers are organized, and white-collar unions comprise over 40$ of total union membership; in Germany only 22$ are organized and these make up about 25$ of total union membership. Swedish figures are from Anders Kjellberg, “The Swedish Trade Union System: Centralization and Decentralization” (Paper presented at the Twelfth World Congress of Sociology, Madrid, July 9–13, 1990); German figures are from Müller-Jentsch, Walther, Basisdaten der industriellen Beziehungen (Frankfurt am Main: Campus, 1989).Google Scholar

49 See fn. 42.

50 See especially Hohn (fn. 7).

51 Thelen, (fn. 21), chaps. 3, 4Google Scholar, on which this and the next two paragraphs draw.

52 Streeck, Wolfgang, “Gewerkschaftsorganisation und industrielle Beziehungen: Einige Stabilitätsprobleme industriegewerkschaftlicher Interesenvertretung und ihre Lösung im System der industriellen Beziehungen der Bundesrepublik Deutschland,” 11M Discussion Paper 79–30 (Berlin: Wissenschaftszentrum Berlin, 1979).Google Scholar

53 It is not uncommon, for example, for central contracts to contain “opening clauses” on nonwage issues that call for a second round of bargaining by works councils at the plant level.

54 Interview with Mayr, Frankfurt am Main, 1989.

55 Both Franz Steinkühler, president of IG Metall, and Klaus Zwickel, the executive board member in charge of collective bargaining policy, have endorsed this approach. See Kölner Stadt Anzeiger, August 27, 1988; Zwickel's speech in IG Metall, Die Andere Zukunft: Solidarität und Freiheit, 6 vols. (Cologne: Bund Verlag, 1988), 6:1128Google Scholar, esp. 18; and Steinkühler's, remarks in Die Andere Zukunft 4:126–28.Google Scholar

56 Pontusson, and Swenson, (fn. 13), esp. 4245.Google Scholar

57 Interview with representative of Metall, August 1992.

58 Interview with Anders Sandgren, Stockholm, August 1992.

59 See, e.g., Mahon, (fn. 43), 89.Google Scholar

60 However, the resulting legislation is in some ways weaker than German codetermination. For a comparison of Swedish and German codetermination, see Thelen, (fn. 21), 209–14.Google Scholar

61 Pontusson, and Swenson, (fn. 13), 1112.Google Scholar

62 It is important to note that there was nothing inevitable about the extension of solidarity to encourage intrafirm wage leveling. In fact, one of the architects of the Swedish model, former 10 economist Gösta Rehn, is critical of the trend toward wage compression between the skilled and unskilled (interview with Rehn, Göteborg, May 1991).

63 Lash, (fn. 10), 218–20Google Scholar; Martin, (fn. 13), 8283Google Scholar; Pontusson, and Swenson, (fn. 13), 2935.Google Scholar

64 Pontusson, and Swenson, (fn. 13), 41.Google Scholar

65 Ibid., 17–18; also telephone interview with Åke Nordlander, former president of VF, August 1992.


66 As of this writing (May 1993), employers and union in the metalworking industries had just resolved a conflict over employer demands for the renegotiation of a previously bargained contract for the East. But the deeper problem in the East is the failure of a significant number of firms to join the employers' associations, which leaves them outside the system of coordinated bargaining altogether. This is a concern for both the unions and the employers' associations. As a representative of the BDA put it: “On this point we have parallel interests [gleichgerichtete Interessen]. We have to make it clear to employers that we are stronger as a collective. And of course that is especially true in the new states”; quoted in Die Welt, August 5, 1992.

67 The following account draws both on 1989 interviews with Ingemar Göransson and other members of the Metall research department that authored the “solidaristic work” proposal and on a presentation by Göransson (himself now at the LO) at an IG Metall workshop on work reorganization in Büdingen, Germany, September 1990. See also the official program in Landsorganisationen i Sverige (LO), Det utvecklande Arbetet (Stockholm: LO, 1990)Google Scholar, a report prepared for the 1991 LO congress; as well as Mahon, Rianne, “From Solidaristic Wages to Solidaristic Work: A Post-Fordist Historic Compromise for Sweden?Economic and Industrial Democracy 12 (August 1991).Google Scholar

68 Tore Andersson, the negotiations secretary at LO, appears to embrace a new division of labor between central unions and shop stewards when he says: “One way of doing things is through new liberty at the workplace, and we favor that. But it should not be an affair between each individual and his or her employer; [the unions] have to provide guidelines and a framework, though not a detailed agreement with a lot of paragraphs”; interview with Andersson, August 1992.

69 Interviews, Stockholm, 1992.

70 Dagens Nyheter and Svenska Dagbladet, August 12 and 14, 1992; on the general need for greater white- and blue-collar coordination, see also LO, “Samordnade Förbundsförhandlingar” (Report of the LO'S Wage and Working Life Project, May 19, 1992), esp. 25–26.

71 See, e.g., several of the essays in Goldthorpe (fn. 34).

72 Golden, Miriam and Pontusson, Jonas, eds., Bargaining for Change: Union Politics in North America and Europe (Ithaca, N.Y.: Cornell University Press, 1992)Google Scholar; Locke, Richard, “The Resurgence of the Local Union: Industrial Restructuring and Industrial Relations in Italy,” Politics and Society 18 (September 1990)Google Scholar; idem, “The Demise of the National Union in Italy: Lessons for Comparative Industrial Relations Theory,” Industrial and Labor Relations Review 45 (January 1992); Turner (fn. 21); Thelen (fn. 21).


73 Martin (fn. 13), chap. 6, for example, emphasizes the ideological component in the attack on centralized bargaining in Sweden.

74 Streeck, (fn. 3), 62.Google Scholar

75 For an overview and discussion, see Thelen, Kathleen and Steinmo, Sven, “Historical Institutionalism in Comparative Politics,” in Steinmo, Sven, Thelen, Kathleen, and Longstreth, Frank, eds., Structuring Politics: Historical Institutionalism in Comparative Analysis (New York: Cambridge University Press, 1992).Google Scholar

76 See, among others, Berger, Suzanne, ed., Organizing Interests in Western Europe (Cambridge: Cambridge University Press, 1981)Google Scholar; Zysman, John, Governments, Markets, and Growth (Ithaca, N.Y.: Cornell University Press, 1983)Google Scholar; Hall, Peter, Governing the Economy (New York: Oxford University Press, 1986)Google Scholar; Skocpol, Theda, “Bringing the State Back In: Strategies of Analysis in Current Research,” in Evans, Peter, Rueschemeyer, Dietrich, and Skocpol, Theda, Bringing the State Back In (Cambridge: Cambridge University Press, 1985).Google Scholar

77 The logic of this argument bears some similarity to that in Hattam, Victoria C., “Institutions and Political Change: Working-Class Formation in England and the United States, 1820–1896,” in Steinmo, Thelen, and Longstreth (fn. 75).Google Scholar

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