Workforce segmentation in Germany: from the founding era to the present time

Abstract

Despite a more recent debate about ever deeper segmentation, the authors argue that since industrialization, Germany has continually experienced a dual labor market. One segment contains the primary segment of better paid and more attractive jobs, while the secondary segment encompasses rather low paid, less stable and less attractive jobs. Dualization is the result of firms which are likely to hire full-time and long-term workforce for its core activities while relying on more flexible forms of employment for other activities. Based on an in-depth examination of the structure of the workforce since 1871, the article investigates the factors which account for the origin, evolution and the peculiarities of the country's core workforce. The authors show that a non-negligible part of the working population has always been subjected to marginalization, but that the dividing line between the two segments has changed over time as has the character of the respective groups. Keywords

Welfare recipients’ transition into employment and employment stability in Germany

“…Recalls to previous employers might indicate seasonal employment with less stable employment relationships. Workers in the fields of manufacturing or construction in contrast more often belong to the core workforce, where transitions thus might be slower but employment more sustainable (Eichhorst and Kendzia, 2016). Previous empirical evidence supports the theoretical expectation that jobs in the service sector (particularly temporary agency work) are less stable than in other sectors (Giannelli et al, 2016;Horny et al, 2012;Nagore García and van Soest, 2017;van Berkel, 2007).…”

“…However, in segmented labour markets, these employment opportunities might not lead individuals into permanent employment. The German labour market is divided into a primary segment with stable and better-paid employment and a secondary segment with low-paid and temporary jobs (Eichhorst and Kendzia, 2016). During the past 25 years, non-standard employment has increased in Germany (Eichhorst and Tobsch, 2015).…”

“…Furthermore, these jobs can serve as screening devices and stepping stones towards permanent employment. The German labour market is divided into two segments: one primary segment with stable and better-paid employment and one flexible segment with low-paid and temporary jobs (Eichhorst and Kendzia, 2016). These segments are not completely permeable.…”

“…Small firms more often offer jobs in the secondary segment, which might be less stable (Eichhorst and Kendzia, 2016). Moreover, working in a small firm might offer less stable employment due to smaller internal labour markets.…”

Minimum wage(s) in Germany: origins, enforcement, effects

“…Similarly, the percentage of persons at risk of (in-work) poverty has increased, which can directly be attributed to the Hartz IV reforms (Gerlitz, 2018(Gerlitz, , 1126. Growth in atypical and low-wage work has been encouraged by a number of factors, including (a) legislative initiatives (for example, deregulation of atypical work), (b) employers' preferences and strategies (Eichhorst and Kendzia, 2014;Eichhorst and Tobsch, 2014) and (c) a decline of trade union density to well below 20 per cent and the associated erosion of collective bargaining coverage to under 60 per cent of workers (cf. also Bispinck, 2011).…”