Employment and Labour Market Essay

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Compare two countries in relation to their effectiveness in achieving a balance between delivering economic efficiency for employers as well as fair and equitable outcomes for employees

Part I: Overview of Germany & Denmark
Germany
Germany, officially named the Federal Republic of Germany, located in western-central Europe. The capital city is Berlin. In 1945, Germany was divided into two states Eastern Germany and Western Germany, and in 1990, the country was reunified. Germany was a founding member of the European Community in 1957, which became the EU in 1993. Germany is also a member of the United Nations, NATO and the G8. Germany has the world's 4th largest economy by nominal GDP and the 5th largest by purchasing power parity (big mac index). Subsequently, it is the 2ed largest exporter and 3rd largest importer of goods. The country has developed a high standard of living and features a comprehensive system of social security.

Denmark
Denmark is the smallest of the Scandinavian countries. Well known for its strong welfare state, mixed market capitalist economy and for being one of the most egalitarian societies in the world. Denmark has a labour force of about 2.9 million. More than 73% of the working-age population has a paid job which is higher than the OECD employment average of 66%. Employment rates are generally higher for the better-off in society than the worst-off - 89% of the top 20% of the population has a paid job, compared with 66% for the bottom 20%. This 23% difference is lower than the OECD average 35% and suggests the job market in Denmark is relatively inclusive. According to the World Bank's Gini Index, Denmark has consistently held one of the world's lowest level of income inequality as well as one of the world's highest wages. As of February 2013 the unemployment rate is at 7.4%, which is well below the EU average of 12%.

Part II: Germany vs Denmark
Germany – Labour Market
There are two models covers the whole German labour market, these are co-determinations and collective bargaining. Co-determination is an institutionalised process of employee information, consultation and decision-making in the management of an establishment. The German model of co-determination gives employees unique participatory rights in the decision making process of companies. It is the result of a long and rather eventful history of representation of employee’s interests. Co-determination is mandated by German law and applies to all enterprises whether or not they are union. There are 2 key parts to codetermination: 1. Employee representation on company boards and works councils; and 2. Provides a parallel form of representation to employees that is in addition to the union representation. German law mandates employee representation on supervisory boards and the number of representatives varies by the size of the firm and industry, with special provisions for coal and steel industries. Works council are the second major component of the German co-determination structure. It is mandated by law for private firms with five or more employees. Works council have the right to information, consultation, and co-determination. The law requires negotiation with works council for major operational changes. The councilors are elected by all employees in a firm regardless of union affiliation. Works councilors cannot call a strike, but can sue management in case of a breach of contractual rights. Collective bargaining involves two parties, Trade Union and Employer Association. Collective Bargaining in Germany is highly centralized; most agreements are reached at the regional or industry level. German law does not give exclusive representation rights to unions, and workers can be represented by more than one union. And employers commonly represented by associations in regional bargaining, once an agreement is reached, the terms are extended by law to other employees and firms in that industry. The percentage of
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