NCPA - National Center for Policy Analysis

Once All-Powerful, Germany's Labor Unions Wane

November 29, 1999

Since World War II, labor unions in Germany have exercised tremendous political power. As the union movement declined in the U.S. and Britain, unions in Germany retained their clout -- chopping away at the workweek, extending vacation time and raising wages.

But the competitive pressures of globalization and the growing realization that unions there played a pivotal role in high unemployment and sluggish growth have recently eroded their power.

  • Germany now draws less direct former investment than the Netherlands -- a country one-fifth its size -- reflecting the reluctance of foreign investors to involve themselves in Germany's rigid labor landscape.
  • German labor organizations have lost 3.5 million members since 1991 -- with only one in four workers now belonging to unions compared to one in three at the beginning of the 1990s.
  • German Chancellor Gerhard Schroeder has not been the friend in power that union leaders assumed he'd be -- and he recently told a rally of union members that they "don't represent the public good," but merely represent individual interests.
  • Observers report that workers increasingly voice the opinion that while unions may have been useful in the past, they are no longer so relevant -- and then they avoid union membership.

Union leaders are reportedly out of touch with workers, frequently giving speeches with references to politics and class struggle rather than addressing the current interests of their members. At some plants, stacks of union publications go unread.

Source: Cecilie Rohwedder, "Once the Big Muscle of German Industry, Unions See It All Sag," Wall Street Journal, November 29, 1999.


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