The UN’s Sustainable Development Goal 10 in Germany: Income inequality and the erosion of collective bargaining in contemporary Germany

Abstract

The present dissertation describes the relation between the erosion of the German collective bargaining system and the increase in income inequality since 1990. A series of processes, including globalization and the shocks of reunification and the establishment of the European Single Market, are analysed to explain how they transformed industrial relations in the late twentieth and early twenty-first centuries. The effects of these factors are explored through a longitudinal study of the industrial relations and welfare institutions of Germany. The main findings of this dissertation are: that a shift in the institutional structure of German industrial relations, due to a change in the correlation of forces favouring capital, has contributed to rising market income inequality, through a rising capital share of income and further wage dispersion; and that recent welfare state reforms may reduce its long term redistributive function. Based on this historical path, as well as on the possibilities and constraints of Germany’s contemporary economy, a set of policy recommendations are outlined to correct the diverging trend, with the aim of reverting the loss of bargaining power of labour. Both findings and policy recommendations stress the importance industrial-relations regulation to revert the global trend towards inequality, and consequently, contribute to the achievement of the United Nation’s Sustainable Development Goals.