Economy and Society in Europe a Relationship in Crisis - Essay Example

? The European social model advocates for an economic growth that is characterized by good conditions of work, and high living standards. This is a theoretical version of life that most of continental European states have. This directly contrasts the American-British model of economics, in which employees have to pass through very strenuous conditions of work. This is for purposes of making a living. The reason for the emergence of this social model was to raise the living standards of the Europeans, to that of the Americans (Vanhuysse, 2012). This model came into existence after the World War II. These countries opened their economies by abandoning protectionist policies. This social model was also possible because of the availability of cheap energy to drive their industries. European states usually do not have a single social model that applies to all of them. However, welfare states have some similar broad characteristics. These characteristics include the commitment to a social protection scheme, democracy, social inclusion, and full employment (Vanhuysse, 2012). The European community treaty establishes several objectives that these states have to meet. These objectives includes promoting employment opportunities, improving the working and living conditions, establishment of trade unions, better management and labor policies, encouraging investments, developing human resources, and tackling the problem of unemployment. The focus of this model varies amongst the various European states. This is because each state puts some focus on a different aspect of this social model, and the European treaty. Due to the differences in the implementation of this social model, it has been argued that there are four main social models in Europe (Munck, 2012). They are the Anglo-American model, the Nordic, the Continental and the Mediterranean model. This paper concerns itself mainly with the Anglo-American and the Continental European economic models, and how these models treat employees working in their industries. These social models encouraged industrialization; hence there was the need of workers to drive the growth of these industries. Up to date, business organizations, irrespective of their sizes are responsible for employing a large percentage of workers in Continental Europe, and the Anglo-American economy. These firms account for wealth creation in Europe, and they determine the political organizations which are responsible for regulating the society and the economy. The areas of regulation are on the status of European employees, and their welfares or interest (Burroni, 2012). It is important to denote that the continental European social model is different from the Anglo-American social model. The manners in which these two models treat their employees are very different. This paper seeks to analyze the Anglo American social model, and how it treats its employees. This paper also analyzes the Continental European social model, and how it treats their employees. After these analyses, this paper identifies their differences and similarities. This paper takes a stand that the working condition of the Continental European employees is far much better, than the working conditions of the Anglo-American employees. This paper explains how Continental Europe managed to improve the working conditions of its employees. In explaining these points, this paper focuses on Denmark, Germany, and Netherlands. The countries that ascribe to the Anglo America model are Ireland and the United Kingdom. According to this model, the state plays a minimal role in regulating the performance of its market. That means the elimination of various barriers to trade such as taxes. It also means that the state does not interfere with the pricing system of companies. This is because the level of competition within an economy will most definitely determine the prices of products sold in the economy. This model is also characterized by very high competition amongst companies. This is because it is a capitalistic economy. It also has some selective social transfer systems. The public health system of the state is reserved mainly for the poor, and the schooling system is funded by the government (Hancke? and Studien, 2012). The labor relations in Britain and Ireland are governed by the principles of collective bargaining, and a strong presence of trade unions. Ireland borrowed the concept of collective bargaining from England, and it has practiced it since the last century. Under this principle, labor conditions are decided at the organizational level. That is the employer and the employee negotiates on the terms of employment. The employer can also negotiate with the trade union of the employees on the various terms and conditions of their employment. Another option is for the employer to make a unilateral decision by deciding his own terms and conditions for employing an individual (Burroni, 2012). The role of employment laws under this principle is to establish the manner in which the parties to a negotiation should interact with each other. These regulations touch on the right of employees, employers, minimum wages etc. For example, the employment laws in Ireland regulate the manner, in which an employer can dismiss his or her employees, the requirements for an employee to receive maternity and parental leave, and also redundancy compensation etc. Britain is also regulated by employment laws that identify the relationships between employers and employees (Daly, 2012). These employment laws identify the minimum working hours, the minimum wage, and employee benefits in case of redundancies etc. Ireland and Britain have resorted to the creation of these laws because of the inefficiencies of trade unions to articulate for the rights of employees. Seeing the need to protect employers from their employers, Britain and Ireland introduced these laws, to guide the relationship between the employers and their employees. However, some of these measures have faced resistance from trade unions. For example in Ireland, trade unions are advocating for the enactment of a law that will protect the concept of collective bargaining (Hancke? and Studien, 2012). It is important to denote that when a government introduces minimum wage rate, employers can decide to pay at that rate, even though it is not sufficient. Due to the structure of the market, and presence of many competitors, employees under this social model do not have better working conditions as those of Continental Europe. There is a high level of inequality between the rich and the poor. This is because of disparity in wages. In order for companies to make a profit, employees are always working for longer working hours, as compared to the countries of Denmark, Germany and Netherlands. The continental model of Europe aims at preserving the social status, and money transfers dominance. This model also advocates for the social insurance system which covers unemployment and pensions. This model has a tax system whose rates are high on consumption and labor, whereas the rate of taxation on wealth is low. The countries that ascribe to this system are Germany, Netherlands and Denmark. This main expenditure of these countries is on the maintenance of the social system (European Industrial Relations, 2002). On this basis, they are devoted to the payments of pensions. This model ascribes to the systems of subsidies, and to the principle of security. It doesn’t matter whether a person is employed or not for them to enjoy these benefits. For example in Netherlands, there are social security benefits that an individual will enjoy as long as he or she is an adult, and a citizen of the country. Trade unions of these countries usually have a low membership, and this is partly because employees are always satisfied with their conditions of work (Hancke? and Studien, 2012). Germany and Netherlands have a disability pension system whereby disabled people who cannot perform any work are well cared for. Workers in these countries are well protected by the law, and the government advocates for better pay. For example in Germany, they have a social security system whereby workers who are paid minimum wages are subsidized by the government, i.e. the government gives them a certain percentage of money to cater for their needs (European Employment, 2008). Due to better conditions of work, Germany has a labor policy that encourages the older population to re-enter the labor market. German labor market is developed in a manner that encourages young people to look for work, giving them all the necessary resources that can help them find work (European Industrial Relations, 2006). In fact, the German government has subsidized higher education learning, for the benefit of its citizens. This is for purposes of creating some skilled labor within the market. The country does not advocate for contract working, and it has established a time frame in which an individual can work under contract (European Industrial Relations, 2005). If the time elapses, an employer has to employ the individual on a permanent basis. Germany, Netherlands and Denmark also have employment laws that identify the minimum wages an individual can be paid (European Employment, 2007). However, the difference between these laws, with that of Anglo-American Europe, is that low skilled laborers are enrolled in a social welfare program whereby the government gives them some money at the end of every month. This is for the purposes of catering for their needs, and reducing poverty. Germany, Netherlands and Denmark have a high number of aging employees, and these countries find it difficult to replace (Fangen, 2012). This is because the number of aged is higher than the number of young people. This is a major challenge facing the labor market in Continental Europe. In conclusion, this paper manages to explain the main ways in which the Continental European employees enjoy better working conditions as compared to their Anglo-American counter parts. The main difference that this paper highlights is the existence of the social welfare programs. Countries such as Germany, Netherlands and Denmark have a strong welfare program that caters for the various needs of its employees. For example, these countries have invested so much in pension programs. These programs are also directed to the disable people, who are not able to work, because of their disabilities. Due to this pension system, employees are motivated to work, and hence they achieve job satisfaction. Another point that this paper manages to identify is the concept whereby countries such as Germany, Netherlands and Denmark have crafted some employment laws that establish the relationship between employers, employees, and trade unions. It is important to denote that Anglo-America Europe also has these laws, and yet the living standards of their employees cannot be compared to that of the countries belonging to continental Europe. However, the difference between the employment laws of continental Europe and that of Anglo-American Europe lies on the existence of a welfare program in the former. This paper manages to denote that countries such as Germany and Netherlands have a welfare program where low skilled employees are able to receive some grants from the government. On this basis, they are able to cater for their needs. Bibliography: Burroni, L. (2012). Economy and society in Europe a relationship in crisis. Cheltenham: E. Elgar. Daly, P. (2012). Making the difference?: the Irish Labour Party, 1912-2012. Doughcloyne, Wilton, Cork: The Collins Press. European Employment. (2007). Germany: Co - determination review concludes. European Employment, 397, 1-10. European Employment. (2008). 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Ageing populations in post-industrial democracies: comparative studies of policies and politics. London: Routledge. Read More