German corporatism at its worst: Market order under attack - - Prof. Hans-Werner Sinn
Aug 20th, 2008 | By Finfacts Ireland Business & Finance Portal | Category: News worldwide
German corporatism at its worst: Before the construction company Philipp Holzmann AG went under, its employees offered management a wage cut to save their jobs. But they were not allowed to work more cheaply because the employers' associations (HDB and ZDB) to which Holzmann belonged opposed the offer as did the IG Bau trade union. Why were the social partners opposed to the wage cuts? Because they included competitors of Philipp Holzmann who with their opposition were able to ward off low-wage competition. Philipp Holzmann was forced into bankruptcy.