OPPapers.com

Wage Determination Gloablly

WAGE DETERMINATION IN AUSTRALIA, BRITAIN, THE UNITED STATES OF AMERICA, GERMANY, SWEDEN AND JAPAN
Industrial relations systems and processes of wage determination vary depending on the relevant country. Historically Australia, Britain, Sweden Germany, The Untied States of America (USA) & Japan all have strong centralized industrial relations systems. All countries have undergone transformations in their processes of wage determination with a general trend towards decentralization with Sweden experiencing the most drastic transformation. Collective bargaining has been usurped by enterprise bargaining and individual contracts, such as the Australian Workplace Agreements (AWA's). The State plays a nominal role in the implementation of processes in each system remaining mostly as an implementer of the legislative framework and guidelines in almost all countries. Trade union density is declining in all countries due to economic and demographic issues. It is evident that a trend towards decentralization will continue throughout the various countries (EIRO 2002) due to the ever-increasing global competitiveness and labor market changes. Thus wages are more and more being negotiated and set at the enterprise or individual level. In light of the increased international competition it is apparent that decentralization of wage determination systems is advantageous. It allows for greater flexibility in job roles and links pay to performance-based criteria. Workers are more capable of establishing the rate they believe they are worth as they can individually negotiate pay rates with organizations.

The history of the establishment of industrial relations systems in countries is a crucial aspect when comparing and contrasting wage determination in each country. It sets the parameters to comprehend the use of divergent systems as well as putting into context the changes that each country has and is currently undergoing. For example, Sweden has embraced a dramatic...