Commodification and Control: Tech Worker Responses to Mass Dismissals in Germany and the United States

Job security has been uniformly but not universally undermined across wealthy democracies. Dominant explanations in the comparative political economy literature acknowledge that paths from manufacturing to services-based production are complex, but tend to overlook the role of political struggle in shaping these paths, instead assuming that technological changes and labor market deregulation inevitably result in dismantling employment protection legislation. Consequently, existing scholarship has trouble accounting for why some workers have been able to defend employment security.  Against this view, I argue that variation in workers’ beliefs about managers’ credibility accounts for firm-level variation in flexible, and hence precarious, employment.

To test this hypothesis, I conducted more than a year of fieldwork in Munich and Silicon Valley to compare four cases of mass dismissals at multinational technology firms in Germany and the United States in the early 2000s. I find that workers effectively defend job security when labor organizers challenge management’s economic rationale for dismissals, and I offer a theoretical model for explaining what leads workers to mobilize for collective legal action to enforce employment protection legislation. This model is based on interviews with nearly 150 workers, managers, labor organizers, and public officials, and thousands of primary documents collected from political actors and archives. I analyze these sources alongside online discussions among workers and organizers, as well as legal documents and news articles.

My findings demonstrate that the transition from manufacturing to services-based production has relocated the site of political economic conflict from national policy to the workplace in both Germany and the United States, and has recast the means of struggle from industrial action to economic discourse. While these developments have dissolved labor’s traditional power resources, particularly unions, they have, like all shifts in the balance of power, simultaneously created new power resources. My case studies show that workers mobilize to defend their job security when labor organizers make credible arguments that management’s justifications for dismissals fail to meet the standards formulated by employment protection legislation. If organizers show that mass dismissals are not necessary to firm survival, workers can mobilize collective legal action to protect their jobs.