COVID-19 and labor market relations:
give the German Government a fixed role!
Gezeichnet von Michael Mutschler
It is hard to predict the economic consequences of the pandemic, but it will surely hit the German and the Dutch labor market. How could the pandemic’s impact on the labor market be minimized? In his Expert Statement, Meüs van der Poel asks German politicians to be more courageous and to take a closer look at the Netherlands: “As in the Netherlands, give the German Federal Government a fixed role in labor market relations! German politicians should have the courage to move from dual consultations to triangular labor market relations. No guts, no glory!”
Dieser Beitrag erschien als Teil unserer #expertstatements
The course of this pandemic can be predicted much more clearly than the economic consequences. However, the economic outlook these days doesn’t lie. The COVID-19 crisis will hit both the German and the Dutch economy considerably in the months before Summer 2021. This damage will only partially repair over the longer term, even if the virus was soon completely under control. Productivity growth will be lower for a long time, partly due to reduced innovation and investments.
With regards to the labor market, after a steep increase in unemployment rates, it will take about 5 years for the unemployment levels to come back to a structural level. What is more, as many forecasts on the long-term effects of the COVID-19 crisis on the labor market predict, people who become unemployed, when finding a job again, will have to deal with lower incomes. This is especially true for people that have been out of work for a long time and have therefore lost some of their skills and knowledge.
To soothe the COVID-19 crisis’ impact on the labor market, politics in Germany opted for an extensive package of emergency measures, for letting go of the debt brake and the black zero. But it takes more than a federal finance and economy minister’s deep pockets to tackle the problem. And basically, there is more. Corona makes the structural change in the labor market visible.
Other than the Dutch government, the German government is not actively involved in the restructuring of the labor market. Could the Dutch Polder Model be a solution for Germany?
A German Polder Model?
The socio-economic models in the Netherlands and Germany – the Dutch Polder Model and the German Rhineland Model – are very comparable in terms of industrial relations and socio-economic policy. Both systems are similar in many ways, but there are also huge differences.
This became more than evident when the then Chancellor, Gerhard Schröder, tried to introduce a German Polder Model in 2001 consultations between government, employers and employees failed, because the latter were used to negotiating with one another without active government interference.
The Dutch Polder Model, on the other hand, ensures the organized negotiation between employers, labor unions and independent, government-appointed members of the Economic Council (Sociaal Economische Raad, SER) to negotiate wages and working conditions.
In contrast to the dual negotiations in Germany, in the Netherlands, there is thus a triangle that sets the labor market’s framework and the government, via the SER, has a fixed role in these triangular consultations.
The Dutch SER
The SER is a socio-economic advisory board that plays a decisive role in consulting the government. In the Dutch SER, entrepreneurs, employees, and independent experts (crown members) work together to reach agreements on important socio-economic issues. By bringing together different organizations of the society, the SER ensures a permanent dialogue between these groups on these issues. Thus, agreements can more easily be achieved.
The most important functions of the SER:
- The SER advises government and parliament on socio-economic policy.
- The SER facilitates agreements. One recent example is the conclusion of the energy agreement in 2013. The agreements in the Energy Agreement, which will continue until 2023, is included in the Climate Agreement in 2019.
- The SER forms alliances for international corporate responsibility.
The Dutch SER’s role in the current structural change of the labor market
In the months ahead, the actions of employers’ and workers’ organizations and their response to the structural changes of the labor market will be crucial: There will be a period of recovery of the labor market and a return to “normal” life. But it is important to ensure that no one is left behind.
In the Netherlands, this is the SER’s task.
The most important aim for SER President Mariëtte Hamer is to come together and take care of each other.
The other important task of the SER in the current situation is to look ahead.
Hamer has therefore set up a think tank in which, in addition to the social partners, social and economic institutions take part. This think tank also keeps in contact with organizations other than those mentioned here, through a network of participating parties. The think tank focuses on the consequences of the crisis on the labor market and tackles the question, how the social and economic damage can be minimized as much as possible. And they are not only focusing on the Netherland’s labor market but are thinking beyond borders, looking for solutions that are relevant for the German labor market, as well.
But even though Bundeskanzlerin Merkel and Bundeswirtschaftsminister Peter Altmeier normally look closely at the Netherlands, in the context of the pandemic, when searching for ways to minimize the effects on the labor market and working population, they don’t.
However, the huge problems we are facing cannot be solved by single countries on their own.
In the Netherlands, the SER sets the agenda and facilitates. More than ever, this tripartite consultation platform has an important task and role, in which keeping course and setting the pace is important and the support of the partners involved must be quickly gained. The state intervenes with a lot of money in both the Netherlands and Germany. Why support, but not participate in the decision-making process? Not at the level of the individual company or industry, but at the macro level about the framework for the future labor market. German politicians should have the courage to move from dual consultations to triangular labor market relations. No guts, no glory!