Concerning the long duration and intensity of the last German recession, connected with high risks to get unemployed and stepped up by higher social risk because of new labour market reforms, it is not surprising to find behavioural changes with job seekers and employees. Using descriptive analysis and a Multinomial Logit Model, we show that from firm's perspective unemployed enrolees are willing to take more concessions in earnings and working terms than they did in the past. This is connected to a behavioural change of the employees, who fear for getting unemployed and for the financial and social risks of this status. The more newly employed persons are willing to take these concessions, the higher the pressure on employees und the more likely they are willing to take concessions too. We show this with data of business surveys taken in 2005 and 2006, 9.800 resp. 13.500 German enterprises participa-ted. In many firms this resulted in a further intensification of work followed by enhanced labour productivity. Nevertheless, macroeconomic data until 2007 show that affected employees were hardly able to enforce their claims concerning higher payment. They are stuck hoping to not lose their jobs, especially in professions, where workers can easily be replaced, meaning the whole scope of underqualified and spheres where a lot of unemployed jobseekers are on the market. Generally, globalization and the restructuring of the economy let expect a further increase of negotiation power of employers in these sectors / professions. So, the differences in individual earnings will grow larger and lead to a hardening of economic and social inequality not only between employed and unemployed persons, but also between employees: Some of them have to renounce a fair payment, just to stay in work. It can be assu-med, that in specific sectors and professions the negotiation power will switch further in favour of employers even in case of increasing labour productivity. For the individual employee this implies a swelling risk not to be able to enforce payment claims. The resulting decrease of promotion prospects, demoralization of individuals and the already observable weakening of labour market dynamics will continually undermine the position of employees. That way economical and social equity as being cornerstones of the german social market economy may lose their importance and therefore their strengths.
Labour market reforms Hartz 4 behaviour of employees