For the last blog post of this semester I’m going to talk about employment relations in Australia. For the most part, Australia is leaps and bounds above some other nations struggling to create a cohesive, equitable and enforceable employment relations scape.

When in 1972, equal pay was introduced I think it helped to consolidate Australia as a place where people wanted to live and work. The Workplace Relations Act of 1996, and Fair Work Australia in 2009, now the Fair Work Commission, has helped to strengthen Australia’s employment relations and create a well-rounded system. Although, Australia is not experiencing economic expansion like that of China or India, the economy has had a strong foothold in the global arena due to its natural resources, and this has allowed Australia to grow steadily over the years.

I believe Australia has benefitted from this type of growth, as our employment relations have been able to ‘keep up’ with the demands of the growing economy, a luxury that some other countries haven't been afforded. I did my presentation with Louisa on China and its employment relations and economic growth, and when you compare China to Australia, there are not many similarities that come to mind. To me, China’s rapid growth has not been matched by the reforms to their socialist employment relations, which has lead to a real discrepancy between what the workers need and what is being delivered. Australia, I believe, has been able to effectively match the needs of workers and employers, which has put them in a good place as it looks to the future.

Overall, I think Australia’s employment relations are strong, and this bodes well for the economic future of this country. However, nothing is perfect, and we can certainly take away lessons from other countries. One of the things I’ve taken away from this unit is the complexity of, and variances between, different countries and economies. The ways in which each country we discussed managed their employment relations and went about implementing them was differed and it was interesting to understand how culture, history and economic standing affected the countries.

I hope you enjoyed reading my blog over the last couple of weeks J

Hayley

Korea and Japan: differences, similarities and the Asian Economic Crisis

For my blog post this week, I am going to focus on employment relations in Japan and Korea, specifically their similarities and differences, and also the effect that the Asian Economic Crisis in the 1990s had on Japan, in particular. Japan and Korea are said to have some key similarities and differences in their approaches to employment relations (ER). As outlined by EeHwan Jung (2010) in the article, 'Employment relations in Japan and Korea', similarities include enterprise unionism, paternalistic management, seniority wages, merit-based pay, internal labour markets and the segmentation of labour markets into core and periphery. 

However, there are some key differences, such as that Japan is typically cooperative in nature as outlined by Jung (2010), compared with Korea, which due to the ‘them versus us’ mentality between management and unions. This confrontational attitude is highlighted in the number of working days which are lost due to strike action with Korea counting 114 per 1000 employees in 2000 compared to Japan with 0.7 lost workdays. Unlike Japan, Korea does not follow the practice of lifetime employment, and Korean employers are more authoritarian and market-driven. Thus, Jung puts forth the conclusion that Korea is not a variant of the Japanese ER model, but a mixture between the US model and the Japanese model.

With reference to the impact that the Asian Economic Crisis has had on the two economies, I have found an interesting article by Stanley Fischer (1998), which described the impact on Korea and Japan. Korea was influenced by deep currency depreciation, loss of market confidence and weak financial systems as a result of the crisis, whilst Japan also suffered as a result of its weak financial system and the resultant high unemployment rates and Fischer proposed the need for substantial fiscal expansion for the Japanese economy.

As discussed by Bamber, Lansbury and Wailes (2011) in their article ‘International and comparative employment relations: globalization and change’, in recent years there has been a growth in atypical employment such as part-time, fixed-term and temporary workers, which raises issues such as job security and the leap from atypical to regular employment. There has also been issues arising due to Japan’s aging population and the diminishing of employment opportunities, which is contrasted with the overworking of younger employees due to cuts to recruitment.

It is clear the Asian Economic Crisis has had an influence on employment relations in Japan. However, although some aspects of the traditional model have changed slightly in terms of atypical employment, it has not deviated away completely from the traditional model.

To read more of Stanley Fischer’s article, see here: https://www.imf.org/external/np/speeches/1998/040898.htm

Globalisation and the German Auto Industry

When I looked through the case study for this week, ‘Employment relations in the banking and automotive industries in Germany’ by Haipeter, Jürgens and Wagner (2012), I was particularly interested in staffing reductions and job security due to globalization in Germany’s automotive industry. Based on some of the articles that have been released on the subject of globalisation and its impact on Germany, it was clear there is much debate over whether Germany will benefit as a whole, or if it just meant workers are going to be worse off. Words like ‘aftermath’ and ‘catastrophic’ were used… it was intense. So, I thought I would focus my post on the benefits to Germany’s automotive industry, the consequences for the employees, and what this means for Germany's employment relations.

Germany’s traditional employment relations system shifted away from high job security and high pay, due to the effects of globalisation. Offshoring and the increase in the use of agency work in the auto industry has led to staff reductions, and many believe that this poses a serious threat to the future of the German labour market. However, union activity has been strong and served to fight against decreased job security. Unions have been able to hold some control over bargaining strategies on workers’ behalf, and have needed to be forward-thinking and flexible in their approach. The union activity is promising, and as discussed in the case, Germany’s employment relations are still seen as being generally coordinated as a result.

I found an interesting article by Eric Heymann (2012) that highlighted the benefits that globalisation has had for Germany. In his opinion, the benefits of the globalised auto market have given the industry the shot it needed to grow and expand successfully. Heymann states the industry growth of 25% in 2010 has put Germany on the front foot, and the gains in market share have been advantageous for Germany’s economy. A definite struggle exists between organisations who need the market share and profitability to survive, and their employees who are a factor in the cost of production. I’m sure management would have like to keep their production solely in Germany. However, given the opportunities for low cost labour overseas and the success it has generated, I do not see how this can be a viable option for them. 

I’m interested to see what the future holds in terms of the effects of globalization, and whether there will be a definite shift toward the decentralization of Germany’s employment relations.

For more information on Heymann’s article, please follow the link below:

http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000269743/Germany%E2%80%99s+auto+industry%3A+Driver+and+beneficiary+of+globalisation.PDF

Employees and the Bottom Line: The Liberal Market Economy and the Case of North America

Hello! Welcome to my blog about employment relations. As I make my fortnightly blog posts, I would love to hear some of your thoughts and comments. Enjoy!

My first blog post for this semester looks at the article ‘Wal-Mart or Costco: Australia’s 21^st century choice?’ by Goodwin and Maconachie (2006) and liberal market economies with a focus in North America. I found this topic to be very interesting, and in particular I wanted to discuss more about the human side of this story: the employees.

The key difference between Costco and Wal-Mart are their treatment of their employees, and in this case Wal-Mart plays right into the hands of those who believe Multinational Corporations are only concerned with their greed for profits, even at the expense of their workers. The issue with Wal-Mart is that their employees can expect low wages, no employee benefits—healthcare or otherwise—and don’t even mention being paid for working overtime. In this day and age it is worrying that we still need to bridge the gap between fair and unfair work practices.

But why should this matter to Wal-Mart? Apart from building their brand to reflect amiable qualities such as being honest, fair and trustworthy, Wal-Mart should realise that if they want to positively impact their business’ bottom line, they need to first invest in their employees. In his Forbes article, Rick Ungar believes that the downfall of Wal-Mart is their lack of attention to their employees’ wages and benefits, leading to a culture of lazy customer service, low motivation and low productivity. Ungar compares Wal-Mart to Costco, and finds that the difference lies in their treatment of their employees. Whilst Wal-Mart fails to deliver fair wages and employee benefits, Costco’s employees are paid decently, which motivates them to take pride in their work. This makes sense, because, as employees, we are more likely to care for a company who care about us.

Wal-Mart’s current way of operating is not viable for a long term and sustainable future, as the deteriorating culture of the company will result in little or no growth as time goes on. Consumers want the lowest prices, but the cost to the employees is not worth that extra cent, and it should serve as a lesson for all businesses.

For anyone who is interested, here is the article I looked at in my post: http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/