The German Political Economy Between Deregulation and Re-regulation: Party Discourses on Minimum Wage Policies

Abstract

In the German political economy of the early 21st century, labor market policymaking has shifted toward deregulation and liberalization. In particular, the so-called Hartz labor market reforms of the Social Democratic Party and Green Party government, introduced in 2002 and 2003, pushed for employment growth in low-wage and deregulated employment sectors. This article focuses on one of the key debates triggered by Germany’s labor market deregulation after 2002, namely whether the introduction of a statutory minimum wage is required to re-regulate the country’s labor market. Based on interviews with members of the five political parties in the German federal parliament and analysis of each party’s policy-making discourses over time (2002-2012), the article suggests that the deregulation of the last decade has triggered demand for new policies of reregulation. This would include the introduction of a statutory minimum wage in Germany at some future point in time. However, such re-regulation does not question earlier labor market liberalization but serves as a political side-payment to ingrain the shift of the German political economy toward a more liberal regime.