Contesting Compensation: Union Responses to Automation in Britain and Germany

• In Event: Historical Development of Political Economies

Abstract

Is the provision of compensation through the welfare state the appropriate response to the risks associated with automation-induced worker displacement? This paper compares British and West German unions’ responses to automation during the 1950s and 1960s, a period of rapid innovation in production methods in both countries. I focus on the engineering industry, which was at the center of the technological developments of the era and also the largest export industry in both countries. The paper distinguishes between a union strategy that aims to preserve jobs by preventing employers from dismissing workers made redundant by new technologies and a strategy that accepts job losses and aims to secure compensatory transfer payments and government-sponsored retraining. This paper, part of a book project, compares the strategies of the largest engineering unions in each country, the AEU and IG Metall. I show that both of these unions rejected the provision of compensation through the welfare state as the appropriate solution to the employment risks generated by automation. Both unions instead attempted to impose a reallocation of control rights within the firm to force employers to internalize a greater share of the costs of social adjustment to technological change and to provide security for workers at their existing place of work. Despite these similarities, the more restrictive institutional environment in West Germany compelled IG Metall to adopt a more acquiescent stance than its counterpart in Britain, the AEU. The findings of this paper challenge the conventional wisdom about unions’ attitudes toward the welfare state as well as received views in comparative political economy about differences in the orientation of British and West German unions toward technological change during the postwar decades, the era in which Britain is typically seen as having fallen behind West Germany in advanced manufacturing.

Author

• Alexander Trubowitz