A critical assessment of Germany's performance during the Financial Crisis 2008 in the context of German industrial relations: Is Germany successful and its trade partners are unsuccessful?

This paper provides a study on specific features of industrial relations, labour markets and employment regimes in German socio-economic model and its reactions to the financial crisis in these areas and the effects of the Financial Crisis of 2008 on German economy would be assessed. I will first try to explain economic performance of Germany. Because Germany stands as a proper case to examine in order to understand the Financial Crisis of 2008. The financial crisis in 2008 has negatively affected the Germany's employment regime which provides "institutional comparative advantages" to Germany in certain sectors those require "incremental innovation". Its ongoing relative success in exporting relies not on Germany's deregulative economic policies; rather on that its trade partner countries have not yet enhanced their institutional comparative advantages." With other words, since its trade partners could not maintain price competition as the gap between Unit Labour Costs of Germany and its trade partners has not yet closed, Germany had a room for maneuver, despite of the deregulative policies. The argument will be tested via the Varieties of Capitalism Approach as theoretical background would be elaborated. The VoC approach is useful with its "institutionalist historical understanding" to comprehend both the institutional reforms carried out before and during the crisis and also the special position of Germany within European economy. The model consists of the stable (not increasing) unemployment rate and women employment are scrutinized as positive effects; precarisation of working conditions and increasing poverty are attributed as negative effects. The reason behind this preference is that to reveal that the ongoing deregulative economic policies do not produce merely positive results, unlike it is mostly acknowledged; rather they cost at the expense of distortion of fair income distribution. This study tries to analyse what changes women's employment has gone through and how atypical works' trends (including part-time and mini-jobs) have changed before and after the crisis. Keywords: German labour market, trade union, employment regime, unit labor cost, bargaining power of labour, unemployment, work council, skill composition