‘Wage share’ the percentage of national income that gets paid out in wages has been flat or declining across the developed world for the past two
decades according to the Organisation for Economic Cooperation and Development (OECD). The new labor market is being shaped by growing global
competition, spurred by the rise of cheap manufacturers in China, India and Eastern Europe and the price-chopping effect of both the Internet and giant
In the United States and Europe businesses have seen steady profits over the last decade but workers’ wages are losing ground. The strange Yankee
virus of a booming economy and payroll declines seems to have spread to Europe. There is talk of the end of the 35 hour week in France; big-name
companies like Siemens and Daimler-Chrysler have used the threat of relocating jobs to secure record pay and benefit cuts; and recently in Germany,
40,000 workers demonstrated in the streets against reduced worker benefits and government labor reform.
Experts say the global labor market has not changed this dramatically since the Industrial Revolution. What’s different now is being globalised – that is,
in the service sector, which counts for the bulk of employment in the developed world, it seems any job can be exported abroad. General Electric has a
’70-70-70′ plan where it outsources 70% of its ‘head count’, pushes 70% of that outsourcing offshore and locates 70% of its workers in India!
BUT Germany’s BMW maintains a 1950s formula for work and achieves industry-leading profit margins. In the 1950s BMW workers helped persuade a
big shareholder to save the company from being sold to outsiders. In return the employees made wage and work-rule concessions to save jobs. The
BMW formula for work is based on flexible schedules that apply to blue and white collar workers alike. They often work a 40 hour week despite a
national union contract of 35 hours. There is no overtime pay, working hours fluctuate with demand, but job security is guaranteed. Labor relations are
so good BMW is opening a new plant at Leipzig next year while rivals look for cheap labor to the east.
Workers put in overtime as needed and place extra hours in a time bank, to be withdrawn as time off during slow periods. The result is more paid time
off: one worker recently tapped his account for an 8 month holiday in South Africa. There are 300 different shift models with one shift that allows workers
to go home to milk the cows! This collaborative approach, tested over several decades, flies in the face of warnings from the European Bank UBS that
‘Unemployment appears to be a feature of this recovery that will persist’. The way of work is certainly evolving.