Changes in the System or Change of System- The National Employment Model of Germany

Abstract

The controversial assessments of the German employment model in the literature are generally based on analyses focused on individual pillars of the model, such as the production system, or the welfare state. The present paper suggests an alternative view that takes into account the interactions between various elements of the employment model. We argue that, by the implementation of what we call a German variety of lean production, the competitiveness of the manufacturing industry has been boosted over the last few years. In contrast to earlier decades, however, the success of the export machine does not entail a more general employment dynamic. That is, the cranks between manufacturing and the rest of the employment system have been damaged substantially. Most importantly, over the last two decades consecutive governments have reduced the state’s anchor role for the whole of the employment model and the potentials for its revitalization. The major reasons for this drawback include the conservation of the male breadwinner–focused structure of the welfare state and a fundamental shift in government economic and social policy priorities in the aftermath of the German unification.