Why Are German Employers Associations Declining?

Abstract

Considerable progress has been made during the past two decades in conceptualizing dynamics within German employers associations—in particular, explanations for declines in density—and the impact on the economy. The verification has not kept pace with theorization, however. This article provides empirics. The analysis confirms earlier conclusions that the interests of large and small employers have increasingly diverged since the mid-1980s. In contrast to the conventional wisdom, however, the authors find that organized labor has not contributed to the cost pressures that have prompted many small-and medium-sized enterprises to leave employers associations. The article also explores employers associations' response to a more challenging environment in light of the “varieties of capitalism” literature. The decision of several German employers associations to offer different classes of membership has qualitatively expanded subnational variety within the German variety of capitalism