comparison and contrast between German and Sweden Economies

comparison and contrast between German and Sweden Economies

Remarkably, for economic prosperity in a country, it is essential to find good policies such as industrial relations. And these industrial relations will, therefore, create good working relations between employees and employers hence boosting their economy. Employees play an enhanced role and ensure industrial relations work. Notably, they are quite essential in job creation and bridging the gap between the rich and the poor. However, they vary differently between each country. Notable countries such as German and Sweden or Australia and New Zealand have exhibited these problems. They have shown a variety of similarities and differences which need to be taken significant consideration. Governments play a great role in determining the features of industrial relations. Industrial relations can propel a country to exceptional economic standards if it is well utilized. Therefore each government must ensure it develops excellent policies. Thus taking the different cases will enhance to find various features through the comparison and contrast of the given countries. And this will be easily implemented by subdividing each situation differently.

German and Sweden

Employers Association

Primarily, there is a declining interest in employer association in Germany as compared to Sweden. Sweden has over 80% of its employees in organizations. However, in both countries, employees do not experience any hindrances while joining and taking part in solving different issues that affect them. In any case, both countries being a democratic advocate for employee associations. In both countries, the associations are involved in the social policies, interests of the labor, which primarily also consist of collective bargaining. In both countries, employers associations play a critical role together with trade unions in influencing the policies the government makes to create a favorable working environment. In both countries, they also ensure that the issues of the employees are well maintained and that they are not exploited.

Trade Unions

Mainly trade unions have a significant role in representing the interests of employees to employers and other entities such as the government. Germany has a low union membership of about 18% compared to that of Sweden, which is about 68%. In both countries, trade unions are mainly centered on industry lines. For example, in Sweden, the textile industry is quite dominant. In both countries, they represent the interests of the employees, such as their pay and working environment. And this is mainly in situations involving cases such as overtime payment. There are also no significant restrictions on joining the unions in the countries. In both countries, trade unions are the driving force on gaining the rights of the employees.

Role of state

Notably, the state is the most considerable influence of Industrial relations anywhere in the world. In both countries, it acts as the employer in the private sector; therefore, apparent understanding issues affecting employees and formulating policies to deal with them. In both countries, it also intervenes to protect those working in the private sector by implementing laws that favor both employees and employers. In Germany, it has a more direct role in an industrial role as compared to Sweden, which the state has a limited role to play. In both countries, it is the arbitrator when issues arise hence ensuring there is no division and stalling of economic progress. In both countries, it is bound by the collective agreements as it has to favor all parties in any issue. In both countries, policies by the state are the source of industrial relations.

IR Legislation

The legislation is quite crucial in that it seeks to find all the loopholes that can affect Industrial relations. It aims to help both parties not suffer from exploitation and ensure there is a typical manner of doing things. In both countries, there are quite similar issues, such as there are articles in the constitution of the country that are on industrial relations. In Germany, the Industrial relations are managed by the Works Constitution Act, while in Sweden it is the Sweden representative Act. In both countries, they lack the minimum wage for an employee; therefore, the trade unions act as a representative for their pay. Germany, however, has the Employment promotion act, which they introduced in 1985, while Sweden mainly focuses on anti-discrimination laws and Co-determination Act. The Co-determination act is meant to solve disputes which involve employees and employers. While employment act was a legislative term for fixing increased contracts for employees.

In Sweden, private companies are bound the collective bargaining agreements, which dictate that companies with over 25 employees can appoint two deputies and ordinaries and deputies to the board of directors. At the same time, those with more workers can have additional representation. Also, in the case of a company having more than five employees, it should have an extra worker for safety. However, the German collective bargaining act allows for agreements at the level of companies to have their negotiations between the management of the organization and Unions. The constitution and court support the initiative of using collective bargaining.

Dispute Resolution System

Remarkably, there are dispute resolution measures in German, unlike in Sweden. That is, they still use the traditional way of doing things such as using labor courts and works council. However, Sweden has well-defined policies, such as the use of a conflict resolution system. It has a national mediation office where both parties can agree on the challenges they face. Trade unions also play an enhanced role in solving disputes between employees and employers in both countries. And this is because they fully ensure that both players fully come into an agreement that is favorable and inclusive. In Germany, the work councils are involved in engaging and providing solutions in a dispute while in Sweden uses the Co-determination Act, which helps solve disputes. Both cases are quite essential in ensuring a good relationship between employers and employees. In German, there is a supervisory with a third of its members as employees, while Sweden mainly uses collective agreements. All these are perfect means to solve a dispute.

Major Changes

Regarding the issue of industrial relations, there has been an enormous transition for quite a long period since the early 20^th century. In both countries, there has been the inclusion of methods of solving disputes, such as the collective agreements and the Co-determination Act. And this has helped in ensuring that both employees and employers resolve their conflicts in a right way. Both countries have also seen an increase in diversity, especially in Germany. And this has ensured that organizations continue working towards achieving significant progress. Germany has also since introduced the national minimum wage, unlike in Sweden, where there is no such statutory. And this has helped the workers gain enough in Germany. Germany has also introduced the low wage sector, and this is not the case in Sweden. And this has been mainly attributed to the growing economy hence the need for more workers. Both countries have seen an increase in democratization as employees have more trade unions and workers organization. And this has ensured they easily champion for their rights.

Australia and New Zealand

Employer association

There is a lot of dynamism in employer association in Australia, unlike in New Zealand. Currently, in Australia, the organizations have moved from their original industrial functions to be more political. Unlike in New Zealand, where the associations still lobby for industrial actions. Both countries, however, still have very many employee organizations. Both countries have experienced both employee and also employer cohesion in such that they have maintained divergent views and roles. In both countries, they define the task to be played by the employer in industrial relations.

Trade Union

Notably, the regulation of trade unions is not that much in New Zealand, as is the case in Australia. In both countries, the unions have exhibited similar signs in terms of their growth, decline, and policies. They have also faced the same problems with the state, employers, and also the labor market throughout their history. However, there has been a slight difference in that in Australia, and there is more focus on the system of the unions as they have developed to be more political, unlike New Zealand, which still is in technical issues. In both countries, the density of the trade unions has suffered a sharp decline. And they have experienced change towards few but broad alliances.

Role of State

Most governments play a similar position. In both countries, the state has a critical role in determining the income tax rate to be changed. Secondly, the amount of expenditure for setting aside to defend businesses that is both the employees and employers. Thirdly, both states dictate the amount of money that is undersupplied in the market under any particular time. Therefore in both countries, the rules significantly affect the welfare of the industries, thus ensuring that they either progress or collapse.

IR Legislation

Both countries have introduced the minimum wage for employers. And this was because of the argument that unskilled laborers should be capable of providing for their families. Both states have enacted enough legislatures to cater to issues concerning unions and workers. In both countries, there have been reforms which have ensured that unions and employers solve different problems at the workplace.

Similarly, in both countries, the government has limited power on issues concerning industrial issues. That is, they are not actively involved in formulating and implementing rules. However, unlike New Zealand, Australia has a federation that has been in existence since 1901, which makes laws concerning arbitration and also conciliation.

Dispute resolution system

Mostly, these two countries mainly use trade unions to solve disputes between different parties. However, there are a variety of differences as New Zealand has a unicameral parliamentary structure, while Australia has a bicameral structure. Therefore New Zealand quickly makes reforms hence solving disputes faster than Australia. The former has unique acts such as the labor relations act, which defines how disputes should be resolved while the latter also has other acts that seek to outline how disputes should be solved. It is almost impossible to work if disputes and conflicts are not resolved hence ensuring that all parties are satisfied with the decisions.

Major Changes

Throughout history, they have been notable changes that occurred. Various economic reforms have been experienced in both countries. Notably, is that both countries have introduced trade unions which have been meant to advocate for the employees. Also, the states have introduced a minimum wage requirement to ensure that employees are not exploited. Other notable reforms in both countries have been the introduction of laws to curb the exploitation of workers by employees, such as paying overtime to the people. In both countries, the employer associations have declined in popularity as capitalism has taken root.

All in all, it is quite critical to note that by looking at different things that affect the economy, industrial relations turn out to be significant. It is, therefore, crucial to take great emphasis on the issue of industrial relations. The relationship between employers and employees is significant in an organization. The role played by employees in a company cannot be underestimated, and therefore their welfare is a top priority in ensuring that all the issues are made possible. Thus taking great consideration of their issues and checking different factors that can propel economic growth is crucial. Finally, it is a requirement in industrial relations to view how all the various issues affect a specific topic and hence find a solution. Change is a constant which is always needed to address as the issues in industrial relations continuously change. Therefore finding ways in which to combat these issues is critical. The government has continuously deployed measures that have helped combat disputes and facilitating a pleasant working environment. It is impossible to work in an area where there are continuous conflicts and disagreements which remain unsolved.