Industrial relations and welfare states: the different dynamics of retrenchment in Germany and the Netherlands

Proceeding from an historical-analytical reconstruction of the development of collectively negotiated benefits in Germany and the Netherlands, this paper investigates the role and function of industrial relations as a provider and financial supporter of welfare. It argues that social policy based on collective agreements strongly influences contemporary retrenchment policies. Reviewing the literature on retrenchment policies, the paper argues that unions and employers should be regarded as collective actors supporting retrenchment by offering financial and organizational resources to governments in their attempts at welfare delegation. The implication is that the study of comparative welfare retrenchment should move beyond its focus on analysing the political behaviour of the actors involved, to include industrial relations systematically in its frame of reference. Research should take into account patterns of institutionalization of labour relations at company level, traditions of government support for collectively negotiated benefits, and differences in the relative development of public and collectively negotiated benefits.