Institutions, Labour and Industrial Relations
Edited by Daniel Vaughan-Whitehead
Chapter 5: Does the German social model support the convergence of living conditions in the EU?
Income inequality in Germany increased dramatically owing to the erosion of its wage-setting system, which had followed the inclusive model until the mid-1990s. Nevertheless, social dialogue continued to play a central role in Germany, becoming even more important in recent times. A milestone was reached in revitalising the social dialogue, encouraged by the universal ability to deal with the financial crisis through innovative working time models and the establishment of more than half a million apprenticeships during the crisis, preventing a rise in youth unemployment. The handling of the crisis through dialogue left an impression on the social partners who were all proud to have navigated the crisis successfully. It certainly improved the cooperation between employers’ associations and social partners, and is perhaps the blueprint to follow in the next crisis. Also, the new minimum wage successfully set a low-wage threshold to help stem the competitiveness of some companies to lower wages.
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