By Kevin Stoda, Germany
You may ask what "co-determination" is. In Germany, it is cooperation between workers and companies at the Board of Director level. This is something that does exist in the USA but has existed for nearly 6 decades in one of the world's perennial best economies. According to EUROFOUND, "The concept of co-determination refers to two distinct levels and forms of employee participation: co-determination at establishment level by the works council and co-determination above establishment level, on the supervisory board of companies, which is the main subject of this entry." At the supervisory level of all large companies in Germany, the employees have a 50% representation on the supervisory board of the firm.
In contrast to Germany, in Sweden it is 1/3 representation for employees. Similarly, medium-sized firms in Germany of between 500 and 2000 employees have only 1/3 representation on their co-determining boards--by law. "The employee representatives are elected either by direct election by the workforce if they so wish, or otherwise indirectly by a secondary body of delegates elected by the workforce. The shareholders' representatives are elected by the appropriate shareholders' meeting or company general meeting." This practice actually was first instituted in the Weimar Republic, but has its roots in many alternative philosophies. "In terms of the history of ideas it [the concept and practice of co-determination] covers a broad spectrum, ranging from catholic social theory via radical democratic to socialist perspectives."
After WWII, the practice of co-determination was instituted in the German iron and steel industry. Interestingly, these industries were the source of the first great political unification steps between Belgium, France, Germany, Italy, Luxembourg and the Netherlands in the 1950s occurred in these two industries. In short, this is one reason that one of the three pillars in the European Common Market--and later the European Union--has always been a social and worker or family oriented pillar.
"The 1976 Co-Determination Act was passed in the face of strong resistance from the employers' associations . A constitutional appeal against the Act was rejected by theFederal Constitutional Court in 1979.
As regards the form of co-determination to be applied in the European Company (Societas Europea, or SE), there are three variants available. The first is modeled closely on practice in the Federal Republic and the Netherlands, and the second corresponds to the French system. The third variant provides minimum conditions for co-determination; here, the form of co-determination can be agreed between management and employees as they choose, but employee representatives must be informed and consulted on the company's business situation at least every calendar quarter. As a general principle the nature of co-determination is, however, governed by the provisions on the matter in the Member State in which the SE is located."
AMERICA NEEDS TO LOOK AT THE EUROPEAN MODEL
Author of "Europe's Promise: Why the European Way Is the Best Hope for an Insecure Age", Steven Hill was on Democracy Now today. He noted that the concept of Co-Determination in medium and large companies is one of the many elements of economic and social development which America must consider incorporating if the USA is to learn to handle economic crises with much more maturity than it has over the past 4 decades (or more).
"Co-determination" and social commitments to its citizens for industry and businesses in Europe makes the continent's major exporters, Germany and the Netherlands, particularly strong even during the great global downturn we have seen over the past few years in America (and in the near future). Siemens, BMW, Mercedes, etc. all have "co-determination of workers".
In short, the Europe Union--which is facing the possible bankruptcy of several states--including Portugal, Ireland, Greece--is still the largest economy in the world. Moreover, it is set to whether these economic and bankruptcy crises much better than the USA. This is because the USA does not have the social and economic safety nets nor cross-national social commitments that Europe is already displaying to be quite mature.
In this age of uncertainty, Steven Hill argues that European is way ahead of the USA in health care, early childhood development support, education, wonderful transportation options, a greener economy, and great welfare care. The USA is falling short in most of these areas. "Europe has more Fortune 500 companies than the USA and China combined. It has had a bigger GNP than nearly the USA and China combined."
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