Labor-management partnerships help Europe weather the economic storm

Abigail Paris serves as Program Assistant for the Socially Responsible Business Program.

In 2008, a financial meltdown triggered a deep recession, arguably the deepest recession to face the European Union (EU). Unlike in many other places in the world, the EU—through the collaboration of its employers, unions and governments—was able to avoid sky rocketing unemployment and emerge from the recession relatively unscathed. On March 3, 2010, the European Commission released a report, entitled Industrial Relations in Europe 2010, which highlighted how labor-management partnerships helped the EU adapt to the post-recession world.

The main way this happened was through active social dialogues. These conversations helped create short-term and long-term plans for employers and frame policies implemented by governments. For employers, labor-management partnerships developed, introduced and extended short-time working schemes and wage flexibility, where employees work fewer hours while the government subsidizes their pay. For instance, in Germany, export companies kept the vast majority of their qualified staff, opting instead to shorten the workweek. As a result, these export companies remained cost competitive during the recession and were able to increase their performance in 2010.

For governments, these social dialogues helped implement the EU’s Europe 2020 strategy , which focuses on smart, sustainable and inclusive growth. Jumpstarted by the pressure of the recession, longer-term thinking on the parts of employers, unions, and governments was triggered principally with regard to climate change. Consequential industry changes will impact employment, especially skills composition and working conditions. In Europe, labor-management partnerships have played a major role in finding solutions to the employment challenges created by a changing climate.

The evidence from Europe is clear: countries with high union density can compete in the global economy. Employers, unions, and governments can work together, and have done so in Europe—keeping the worst of the economic storm at bay.

These same types of partnerships can succeed here in the U.S. Since 2005, American Rights at Work’s Socially Responsible Business Program has worked to promote workers’ rights by encouraging sound policies and collaborative efforts that sustain workers, businesses, and society at large. Every year, the Socially Responsible Business Program releases The Labor Day List: Partnerships that Work to recognize these positive social dialogues that are taking place on our shores. While many companies still implement massive layoffs, slash benefits, and disregard workers’ rights in the name of their bottom line, the practices of businesses profiled in these LDLs suggests a better way. And as the evidence from Europe demonstrates, a successful way.

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This entry was posted on Thursday, March 10th, 2011 at 5:15 pm and is filed under General, jobs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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