This paper outlines the similarities and differences between “No-vacation nation USA” and European labor and employment relations, and competing factors. The paper comprises four main sections whereby the first section reviews what European Union is; the second section compares and contrasts the American and the European labor and employment laws; the third section examines the union density reviewing the explanations of the decline of the labor and trade unions in the United States and in European countries; the fourth section features labor standards, wages, minimum wages, and vacation time, among others; finally, the fifth section of the paper reviews the industrial relations and collective bargaining as entrenched in human resource management systems. There are numerous literature sources on declining unions and employment relations; however, the majority of the studies focus on the United States or on a certain country.
The public has increasingly become aware of the role that labor standards should play in the global economy. This awareness is attributed to the augmented economic interdependence among countries that are highly industrialized. Through these labor standards, the terms and conditions of workers are clearly defined. Further, the conditions of employment across the economic sectors are shaped and unified. This is what boosts the affinity for people to make direct investments in foreign countries. It also fosters economic competitiveness, which stimulates the creation of employment opportunities for the surplus populace that is unemployed. Some of the discrete issues that have been at the center of economic convention between the US and the EU labor and employment relations include collective bargaining, work place safety, and compensation of workers, as well as unemployment benefits.
Although issues of labor and employment relations have always been at the top of agenda in many countries, the United States and European Union states have always given them greater emphasis. This is accounted for the fact that, as the world’s leading economies, the duo have great influence on labor and employment standards adopted in other countries around the world. Due to this significance, the two entities have been involved in extensive research to examine labor standards as a whole system within and without their areas of jurisdiction. Other nations have been benchmarking with the EU and US labor and employment standards whenever the need to make requisite adjustment in theirs arises. However, the two territories may be demonstrating dominance because of their pluralistic configuration of their populace as compared to other nations around the world. This is the reason why other nations may find it rather cumbersome to harmonize their labor and employment relations standards to reflect the US and EU standards.
THE EUROPEAN UNION
The European Union (EU) was established in November, 1993. This happened as a result of the Maastricht Treaty, which nearly all the European countries assented to. The union was formed to succeed the former union, European Community (EC). EC had largely been known for being a political and economic confederation of European nations and other affiliate organizations. Under the Single European Act that had earlier been signed in1986, the member states added Articles, 118a and 118b to the EC Treaty (Kaufman 341). Article 118a declared the improvement and the harmonization of the legislation on safety as well as occupational health as among the main aims of the Community (Kaufman 341).
The member nations of the newly instigated union were responsible for a common security and foreign policy, and for cooperation on home affairs and justice. A total of twenty eight European countries subscribe to European Union till today. The formation of EU subsequently led to a plethora of modifications regarding the economic, political and social organizations. Notably, there were serious changes in the labor standards and employment relations. Since then, the European Union has been determined to harmonize workers’ conditions as well as the working environment in all member states. It further initiated a common currency known as the Euro (€). The main purpose of this currency was to eliminate all unnecessary trade barriers that were associated with variations in the units of currencies of member states.
Although it is confirmed that EU does not have substantive political influence in the region, its policies have since made a remarkable impact on the political and economic stability in all of its member states. The headquarters of EU are based in Brussels, Belgium. The union’s parliament often sits here to deliberate on imperative issues that relate to the welfare of its member nations.
LABOR AND EMPLOYMENT LAWS IN THE USA AND IN THE EUROPEAN UNION
As the major world economies of the contemporary society, the EU and the US are obliged to stipulate concrete strategies in regard to the standards of labor and employment of its populace. The discrepancy between the two territories is exercised by the fact that the United States is a sovereign state while the EU is an agglomeration of different sovereign states (Frick & Miguel 529). This difference may make it difficult for the two to compete on a similar platform in the context of the standards of labor and employment. However, the analysis reveals that there have been many similarities as there may be structural differences in their standards.
The EU’s political relationship with its member countries is seemingly sufficiently analogous with the federal structure of the US. This is what forms a clear basis of comparison in terms of labor and employment relations. The implementation of EU labor standards is accomplished through the directives from the European Council under the fundamental rights charter Article 12 (1) (Gahanet el 709). This requires that member states enact labor laws at their respective national assemblies and draw the roadmap to enforce the requisite labor standards. The difference in governing principles between the EU and the US is also worth noting. The EU governing principles majorly inclined on subsidiarity. This means that the responsibility flows from the bottom towards the top management. Conversely, the governing principles in the US are reverse subsidiarity or supremacy. This implies that precedence is taken at the federal level other than at the county or state levels.
In spite of the fact that there is this difference, there are still credible reasons as to why the EU should be compared with the US in terms of labor laws. The EU has since been promulgating all-inclusive directives of employment as well as labor related matters. These entail movements of workers among member countries, working time, gender equality, health issues, as well as safety as provided for in Regulation 1612/68 (EEC) (Vosko 92). Where employers biasedly treat employees in regard to these aspects, employees can launch a suit against them under Article 19 of the Council Regulation No. 44/2001. This is done as a means of fostering social protection to all citizens in member countries (Vosko 104).
On the side of the United States, there has been perpetual expansion of the scope of legislations related to federal labor and employment. However, the expansion has primarily been a phenomenon experienced in post 1930s. This was facilitated by the decisions of the Supreme Court of the United States that was supportive to the federal constitutional authority. The authority entailed regulation of the employment within all the states in the US territory. It would be done under the provisions of the constitution of the United States, which provides the federal government with the authority over interstate commerce. Before the 1930s, the US government’s constitutionality in regulating employment provisions that was uniquely within the states’ boundaries was constitutionally uncertain under the clause of commerce (Emir 47). The decisions of the Supreme Court of the US in the recent past demonstrated that the respective roles of the state and national governments in controlling employment affairs are continually subject to reexamination. However, this should be accomplished under different provisions of constitution of the United States.
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For instance, the Supreme Court outlawed the provision, which applied the US law that prohibited discrimination on the basis of age to state governments’ employees. Through the enforcement of the Equal Pay Act and Title VII the Civil Rights Act 1966, the court eliminated all the barriers that would prohibit all citizens of the US to be discriminated in any way (Koch & Martin 63). According to the labor standard, “The federal government established procedures, terms, or conditions of employment, or employer requirements that are designed to protect employees from treatment at the workplace which the society considers unfair or unjust. The common denominator across all the standards is that they are obligatory and at the behest of the government” (Emir 74).
The court similarly ruled out the provisions of law that prohibited employment of individuals on the basis of disability. This would compel employers to slot persons with disability in their employment roll as long as the individuals exhibited the potential to handle the responsibilities required by the firm. Furthermore, the court compelled all corporate firms to harmonize conditions at work to be favorable for all the workers including those with disabilities. It should be noted that the decisions of the Supreme Court have largely permitted states to have an indirect influence on the outcomes of disputes related to labor (Leisink, et al. 38). They do this by upholding the limitations of the state, especially on picketing on grounds of trespass. The court also permits each state to provide those striking with unemployment insurance.
Within the EU, the principle of subsidiarity as well as concern over the national and supranational levels plays a significant role. However, it is not dissimilar to the prevalent debate in the US, which relates to the proper roles of the state and federal governments in the regulation of the economic activity. Some of these activities include employment relationships as are spelt in different states’ laws. On the other hand, the EU bases its concept of employment on the principle that unfettered markets lead to the imbalanced power between employees and their employers. For instance, employers are expected to treat male and female employees equally. As such, they should not pay women a lower remuneration than men according to Article 141 EC. Similar provisions apply to immigrant workers under Regulation 1408/71 (EEC), which stipulates that “prohibited the discrimination of employees based on their immigrant status, instead provide them equal opportunities and treat in line with the conventional worker rights, terms and conditions of service at any particular work station” (Leisink 55). Consequently, institutionalized unions as well as government regulations are necessary for creating the countervailing power that cushions employees in the labor market.
Owing to the above mentioned reality, the countries affiliated to the European Union are often perceived to as traditionally placing a sophisticated value as compared to the United States in regard to the protection of worker. There is an expectation that the EU would endeavor to enact higher standards of labor than its counterpart. These are standards that always hypothesized as introducing economic inefficiencies and constraining employers in return. On the contrary, the United States is perceived to be imposing a higher value on market forces that are unconstrained. However, this is possibly being done at the expense of worker protection hence resulting in lower legislation of labor standards the EU.
UNION DENSITY, DECLINING OF THE LABOR AND TRADE UNIONS IN THE U.S. AND IN THE EU
The intensity of labor standards in both jurisdictions has never been constant even if it has been oscillating in impressive levels. About 36% of labor force in the United States is said to have been unionized in 1950s (Collins 19). At that time, the union membership in the United States was lower as compared to the same in the European Union. By 1989, it is said that the figure has declined to about 16% (Collins 22). This was deplorable compared to any other developed nation in the world. Since 1986, the union membership in other democracies within the EU has been ranging from 30% to 95% (Barnard 27). Sweden and Denmark are said to have registered the highest membership whereas Germany and Italy the least.
According to statistics, 12.4% of the US remunerable workers were members of the union by 2008. 36.8% of workers of the public sector were also union members (Barnard 41). Nonetheless, the private sector workers only constituted 7.6% of this (Barnard 42). It is ridiculous that the most unionized sectors of the economy are the ones, which have since been registering the greatest decline in union membership. For instance, since 1953 towards the later years of 1980s, membership in construction sectors depreciated drastically to 22% from 84% (Koch & Martin71). The manufacturing sector dropped to 25% from 42%, mining sector declined to 15% from 65%, and sector of transportation dropped from 80% to 37% (Koch & Martin 70). These are worrying trends given that these regions have a great impact in as far as the strength of the world economy is concerned.
The private sector is said to have been largely inconvenienced in regard to the intensity of union membership. For instance, in the United States, there was a 10% drop in union membership in the public sector from 1971 to 1980s (Schmid 71). Concurrently, the membership of the private sector dropped to 42% during the same period (Schmid 68). Conversely, there has never been any drop registered in the union membership within the private sector in Sweden. Generally, in the EU, there are about seven member states, in which there was an insignificant drop in the union membership within the private.
Looking at the above statistics, it can be concluded that the intensity of union membership is stronger in the EU than in the US. This can be attributed to the extent, at which labor standards have been implemented and the comprehensiveness of the laws related to employment both in the public as well as the private sectors. The public sector looks stronger in terms of union membership as compared to private sector across the board. In fact, the United States labor laws seem to favor more the public sector in comparison to the EU laws. However, in terms of unemployment, it is observed that Europe still maintains a higher level of joblessness as compared to the United States. Economists have all along been trying to establish the linkage between unionization and levels of overall growth in GDP and unemployment, but there has not been any credible consensus reached.
It is also crucial to note that the decline in labor standards could sometimes fuel displeasure among the workers who would take to streets in demonstration. This used to trigger violence that has seen a number of people lose their lives and a plethora of others succumb to injuries. Statistics depict that between 1877 and 1968, close to 700 people were killed in the US labor disputes (Schmid 34). In the 1890s, two workers in the US were killed and 140 others were injured for every 100,000 strikers (Schmid 39). Apparently, the figures are worrying, especially when studied in comparison with the striking counterparts in the EU territory.
This shows how porous the laws are in the US are as compared to the member states of EU (Bowers, Michael & David 86). However, the problem may not be attributed to the recklessness of labor laws but rather the implementation. The complexities may be arising from the heterogeneous nature of state laws regarding labor standards and employment relations. Whereas member nations in the EU are mandated to make crucial legislations as long they are in line with the binding provision of the union, the states in the US are only permitted to legislate up to a certain level. The major regulations are then left at the federal level, which poses a huge threat to uniformity when it comes to implementation.
COMPARISON IN LABOR STANDARDS BETWEEN EU AND US
Even though there has been an assumption that the labor standards described in both the EU and the US are significant to both economies, analysts have always observed that the EU experiences a huge problem of unemployment as compared to the US. This is attributed to the varied rates of expansion of the labor market. The US labor market is said to be more robust than any economy in the world. The diversification and the instigation of a 24 hour economy have seen the reduction in the cases of unemployment for its citizens (Bowers, Michael & David 97). European Union countries are still conservative, with their modern ways of operation and oblivious of the fast rate, at which the world is moving, especially in terms of technology. The instigation of numerous online companies is what has expanded and provided many opportunities of employment for its people. There are more people who do not leave their houses in search for jobs in the US as compared to the EU states and elsewhere in the world.
Minimum Wage Rates and Wage Inequality
Comparing the statistics between the US and the EU, it emerges that only the United States has a minimum wage requirement of $7.25 per hour (Craig & Michael 47). On the other hand, the EU does not have any known directive on minimum wage. The reason is that the treaty of the EU member states prohibits them from addressing issues that are related to pay. In this case, the US employees get an automatic advantage because knowing the minimum wage itself eliminates cases of exploitation of workers by employers. It also eases the bargaining process since employees will have a clue about the least amount they would expect in case they are to be employed. However, it is reported that some employers in the US are downrightly perpetuating the practice of paying employees lower than the recommended minimum wage. This misnomer has been witnessed mostly when young employees are hired in a company, disabled workers, student learners, or even full time students. If this irregularity can be eliminated, the US shall apparently be rated as the best place to be employed.
Overtime and Working Time
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In the US, there is no limit on the time that employees can work. Similarly, there are no laws that regulate periods, in which workers can take rest. Instead, the labor standards in the US are set to establish an economic model where financial incentives are used to structure working behavior. It is required that the employer pays nonexempt employees time-and-one-half for all the work over 40 hours in each week they would have worked (Craig & Michael 53). The system is specifically choreographed to simultaneously discourage employer/employee overtime agreements. It is through such demands that there is a match of demand for and supply of overtime hours in many countries.
On the other hand, the EU uses direct legislation to structure working behavior rather than using monetary incentives. Through this legislation, a minimum number of hours are created out of the 24 hours of the day, as well as over one week period (Craig & Michael 49). It also establishes breaks for resting and for meals within the minimum number of hours for working. Employers are also required to address the issue of monotonous and stressful work. At the same time, the labor standards prohibit financial incentives in the systems other than favorable conditions, which will eventually entitle workers to their agreed remuneration. As opposed to this system, the US regulations can still allow individual employers to coerce their employees to work overtime even if they do not like it. However, this calls for local arrangement of the terms and conditions that would be inclined only on overtime arrangements.
Paid Time Offs
With regard to the index of paid time off, the European Union apparently has higher standards for employees who are paid time off as opposed to the United States. The two types of paid leaves are the national and international holidays, and vacation/annual leaves. It is observed that the US’ labor laws recognize national holidays, but they do not impose requirements for special treatment of employee than on the usual days. However, in the EU, the labor laws do not provide for wide holidays. Similarly, both scenarios lack provisions, which require that workers be paid differently during holidays than on ordinary working days. Furthermore, the EU labor laws often demand that all employees working in the Community should receive at least a four week annual leave. This should also be remunerable and be regarded as though the employee was on duty full time. Conversely, there have never been standards that require paid time offs for employees in the US. Therefore, the employees in the EU member states have an advantage over their counterparts in the US.
In both entities, the United States and the EU, there have been clear prohibitions against any form of discrimination in employment based on gender, race, religion, and disability, among others, as stipulated in Article 19 of the Council Regulation No. 44/2001 (Kar 28). Nevertheless, there have been allegations that the EU labor standards still consider employment based on sexual preference. This has been seen when employees peg pay equity on the sex rather than on competence and qualifications. On the other hand, the US is still grappling with the problem of employers recruiting workers based on racial affiliations. There have also been widespread cases when some employees were dismissed unlawfully despite clear provisions of law in Article 28, as well as the protection of employees in the event of unjustified dismissals by their employers in Article 30. Such a situation has been widespread, especially in white dominated regions, as opposed to the black dominant territories. This means that though the laws are explicit, the loopholes still exist in the structure of implementation of these laws. To curb these irregularities, the Supreme Court of the US has been clarifying the laws to the unions and sanctioning the courts to administer punitive measures against those culpable of this crime. Following this intervention, the cases of contravention have since been declining.
Occupational Safety and Health
Both the US and the EU set clear standards for chemicals, contaminants as well as unsafe practices. In addition, the EU requires employers to constantly consult with employees in regard to safety matters. This helps in provision of information, which employers in the US are not allowed to generate by federal law as well as providing training to employees. However, this is not the case with the United States. Furthermore, the EU has a broader definition in terms of health incorporating psychological factors as opposed to the US. Summarily, the EU labor laws provide a superior provision on occupational safety and health as compared to the US.
Industrial Relations and Human Resource Management
The two areas are interdependent in a manner that none can suffice to bring success in the union without the other. A number of participants have upheld a philosophical commitment toward joint governance, especially with regard to the principle and utility of collective bargaining. Some take an advanced perspective concerning collective bargaining, but at the same time, they stamp lightly in dialogue and research so as not to risk their good standing in the field. The ideological commitment between the two entities has both strengths and weaknesses. Whereas on one hand, it helps to establish firm international relations, the field of independent identity , community of interest, as well as guiding research on practice and policy, it undermines the ability of the field to make a reversal of its long-term decline on the other hand. It also fails to attract new participants considering new practices of employment as well as policies, which may serve various social interests.
However, in some way conflicts with the certain organizational interests of the union movement may also arise, which may not work well with the international relations. This makes employers who are not in the union remain subjects of high charges and ticklish subjects in international relations. Along with that, international relations risk to become irrelevant in case it excludes nonunion employment relations within its domain. This can be inconveniencing to the organization, especially considering the fact that many countries’ most innovative and progressive employers are mostly under no organization. Nonetheless, according to the provisions of collective bargaining and action as stipulated in Article 28, the value premises which caused the infusion of the field since the signing of the New Deal, held that collective bargaining together with trade unionism remain the most preferred systems of determining the terms and conditions of employment (Williams & Adam-Smith 45). The only thing is that following this contradiction, a number of day controversies and problems have been born.
As observed, labor standards are relatively high at the community level in the EU as compared to the United States. As pertains the paid-time offs, paid vacation, working time, occupational safety and health and employee involvement, the EU performs much better than the US by a significant degree. The US seemingly has an upper hand over the EU in the areas of addressing minimum wages as well as in standards of collective bargaining. However, the latter is observed to be the outcome of a function of the EU choice of declining to regulate employees’ collective bargaining at the community level. As pertains to the legislations of anti-discrimination, the EU and the US are more or less equivalent. Assessing the results in both economies, there is a remarkable consistency with the conventional wisdom in regard to labor and employment standards in both jurisdictions. For instance, at the community level, the EU seems to provide greater protection for workers as opposed to the US. Furthermore, in case the EU would choose to regulate a collective bargaining at same level as the US, it would still be higher in the overall performance that what the results portray at the moment. Finally, in terms of labor market and employment relationships, the US is depicted as competitive in terms of buying and selling activities as compared to the EU. This means that the US presumes that employers and employees are price takers.