5th German Sino Conference Atypical Employment in Germany - Recent Trends and Social Implications

Berlin, 10.11.2010 Fußzeile 1

“Atypical” employment in Germany:

Recent trends and social implications

Dr. Sigrid Betzelt

Professor for Sociology of Work and Organizations

BLE / Faculty of Business and Economics

5th German-Sino Conference on Public Administration

Berlin, 14-17th Oct. 2010

2Prof. Dr. Sigrid Betzelt

Agenda

“Atypical” employment in Germany: Recent trends and social implications

1. The traditional employment model in (Western) Germany

2. Changed economic, social, and political conditions

3. Outcomes: Recent trends of “atypical”employment in Germany

(…and in other European countries)

4. Social implications

5. Conclusions: Political responses?

Berlin, 10.11.2010

Berlin, 10.11.2010 3Prof. Dr. Sigrid Betzelt

1. Traditional employment model in

Western Germany

A brief historical review:

1950s-60s: Specific historical conditions favouring labour

� Economic boom period in Western Germany

� Labour shortage � strengthened trade unions

� Welfare state: employment-based social security system

(Bismarckian social insurances)

� � Establishing a certain form of employment with strong

protection & social security as a „standard employment

relationship“:



Western Germany

The „standard employment relationship“:

� permanent employment (strong dismissal protection),

based on work contract with one employer

� full-time, normally 8 hours/5 days a week

� collectively agreed, living wages: breadwinner for family

� rule of seniority: upward mobility for senior workers

� full social security: full entitlements in public insurances for

old-age, invalidity, unemployment, health care (later: long-

term care)



Western Germany

This standard employment relationship:

� is a reference model for employment in Germany:

- characteristics seen as “best practice” of labour

- social security entitlements preconditioned to this norm

� empirical reality: only for large majority of male workers

� This form of employment is complemented by a

specific family model: “male breadwinner model”

� clear division of labour: women stay at home and care for

husband and children, husband is breadwinner

� women & children are socially secured by social entitlements

of husband (not in their own right)


2. Changing economic, social and political

conditions

Challenges to the standard employment relationship:

Since mid 1970s:

� Economy: Recession, increasing unemployment, weakened

trade unions, firms’ demand for more flexible labour contracts

and lower labour costs

� Society: birth control, expanded higher education, social

movements

� individualisation, increased female labour market

participation



conditions

� modernisation of family model: women in part-time

employment

� first “atypical” employment form matches both firms’

demand for flexible, low-payed work and greater female

economic independence

But: standard employment still predominating for men



conditions

Since end 1980s, 1990s:

� Economy: more competitive & volatile markets

(globalisation), tertiarisation (new demand for services),

increasing unemployment, firms’ demand for flexible, low-cost

labour

� Politics: collapse of European socialist countries, German

unification, public budget constraints ?

� neoliberal paradigm

� deregulation of labour market: lower dismissal

protection, strong support of flexible employment forms

Since 2000s: Lower social protection against unemployment


3. Recent trends of “atypical” employment

Outcomes of economic, social and political changes:

Standard employment relationship is eroding:

� empirically: decreasing shares of labour force,

though still majority of mid-aged men

� but still the reference norm in social security schemes

� raising social problems (section 4.)



Source: Statist. Bundesamt 2008; Microcensus; sum smaller than single value because of multiple

employment in atypical forms; part time only defined as atypical if < 20 hrs.


Different Data Base (German Socio-Economic Panel)

that includes part-time >20h:

37% of all employees “atypical“

(+12 percentage points since 1997)

• marginal employment doubled

• temporary agency work tripled

• fixed-term employment +46%



Graph 2: Gender distribution of atypical employment 1997-2007

0

5

10

15

20

25

30

35

1997 1999 2001 2003 2005 2007

year

em

plo

ye

es

in %

men: part-time employees < 20hrs

men: marginal employees

men: fixed-term employees

men: temporary work agency employees

women: part-time employees < 20hrs

women: marginal employees

women: fixed-term employees

women: temporary work agency employees

“Atypical work” = still mainly women’s work,

but men are catching up

Source: Statist. Bundesamt 2008; Microcensus; sum smaller than single value because of multiple

employment in atypical forms;

part time only defined as atypical if < 20 hrs.


Microcensus Data: 38% women „atypical“, men 14%

GSOEP (incl. all part-time): 57% women, 17% men

� 1997 – 2007: share of men in atypical empl. doubled

� Young, migrant, and low-skilled people are more often

employed “atypically“

� Working hours decrease, esp. for women, more

involuntary part-time (lack of full-time jobs)

“Atypical work” = still mainly women’s work,

but men are catching up


Huge increase in low-wage employment

Federal Republic of Germany, 1995 and 2006 in Percent

Shares of low-wage empl.

within category

Changes in

low-wage

employment

Changes total

employment

1995 2006 1995-2006 1995-2006

Full-time 11.0 14.3 +12.6% -13.5%

Part- time 22.2 23.4 +24.5% +18.0%

Marginal emp. 86.0 91.7 +181.2% +163.8%

Total 15.0 22.2 +43.3% -3.1%

Source: Kalina/Weinkopf, IAQ-Report 2008-01; SOEP

6.5 million employees work for low wages, i.e. less than two-thirds of the

median wage: West 9.61 €, Ost 6.81 € (gross wages per hour, in 2006)


Low wage employment: mainly female

More than two-thirds of the low-waged employees are

women (69%):

Low-wage shares across gender and working hours, in percent (2004)

Men Women

Full-time 10.8 21.8

Part-time 15.6 21.9

Marginal emp. 87.4 85.5

Total 12.6 29.6

Source: SOEP 2004, Kalina/Weinkopf, IAT-Report 2006-3


Low wage sector no "springboard“: 80% of men, 90% women remain low-waged after

6 years of employment

Low upward mobility

Source: IAB-KB 8/2008


Trends in self-employment:

Increasing

single-

person self-

employed

(without

employees)


Trends in self-employment:

� Mostly single-person self-employed (without

employees) due to different “push”- and “pull”-factors

� More often not lifelong self-employment (transitions out

of and into unemployment or dependent employment)

� Very often rather low incomes (also for highly-skilled)

� No social security coverage!

Berlin, 10.11.2010

Atypical employment rate in Europe

1998 and 2008

19Prof. Dr. Sigrid Betzelt

Source: Schmid / Protsch 2009

employees and

single person

self-employed


4. Social implications (Germany)

Trend towards erosion of standard employment has

problematic social implications, esp. in German

welfare system:

Certain (not all) “atypical” employment forms entail:

� low wages: no living wages, not even for individuals

� low opportunities for upward mobility and upgrading

skills

� low social security (low or no entitlements to social

insurance)


4. Social implications

� affecting certain groups in such precarious jobs:

women, young people (also men), low-skilled,

migrants (from outside EU)

� life-course: more discontinuous employment

careers (periods of unemployment, atypical empl.)

� increasing social inequalities (“insiders / outsiders”)

and poverty risks

� increasing fears of “insiders” (middle class),

due to lowered social protection against

unemployment: threat of downward mobility


5. Conclusions: Political response?

Erosion of standard employment challenges the social

security system (that still refers to it as a norm)

� raising poverty � burdening public budgets

� social security system has to be re-designed:

Idea of “flexicurity”

= combine flexible labour market with social security

e.g. include all “atypical” employment forms in social insurance,

or establish better (tax-based) social security scheme,

improve transitions between different forms of employment,

un- or non-employment (transitional labour markets)


5. Conclusions: Political response?

“Flexicurity” idea is in the scientific debate for about

10 years,

on level of European Union also discussed as concept,

but not yet realised in most countries

Impediments: political power structures (employers’

power), public budget constraints?

Hope for future? Democratic legitimacy of governments

is eroding, but outcomes questionable?


Thank you for your attention!

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5th German Sino Conference Atypical Employment in Germany - Recent Trends and Social Implications