Revival of the ‘German Model’? Destandardization and the New Labour Market Regime

Abstract

The German economy is back in the international spotlight. International observers from academia, politics and media notice that the country’s economy went through what appeared to be the biggest crisis of post-war capitalism without major turbulence (The Economist, 2012). Unemployment rose only marginally in the aftermath of the Lehman Brothers financial collapse in 2008, and the economic recovery was quickly launched in early 2010 when other Western countries were still affected by imbalances. Since then, Germany’s export industries have experienced an unprecedented boom lifting employment numbers to a post-war high. At first glance, history seems to repeat itself. In the late 1970s and 1980s Anglo-American observers coined the term ‘German model’ (Markovits, 1982) to describe Germany’s remarkable resistance to the crisis of post-war Fordism. While the US and the other leading economies were hit hard during this time, German firms successfully asserted their market shares by focusing on product quality and innovation. The German employment model, characterized by stable and long-term employment, institutionalized codetermination, comprehensive vocational training and low wage dispersion, proved to be a key factor in German firms’ superior performance in the crisis which in retrospect marked the end of the ‘golden age’ of post-war capitalism.