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Labor Institutions

Labor institutions are any policy intervention or collective organization that confer workers power in wage and employment determinations. Examples include labor unions, minimum wages, employment protections, unemployment insurance, codetermination, and collective bargaining.

Board-level representation is only one piece of the comprehensive codetermination regulatory strategy as practiced in Europe. Without a supporting framework that includes representation from the group up, codetermination may be less successful in the US. Workers at a Volkswagen plant in Tennessee sought to establish the first German-style works council in the United States, but the union lost the plant workers’ vote. European countries with codetermination laws already have high baseline levels of worker involvement in decision making, rendering the potential impacts of codetermination laws moot. Codetermination laws have been passed in countries with already existing pro-worker institutions, such as centralized collective bargaining systems, high union coverage, and extensive labor market regulations. Thus, the low hanging fruit of codetermination's potential impact may already be plucked. In Denmark, Norway, and Sweden, workers in about 53% of covered firms take up their right to codetermination. In Finland, the number is 15%. Even without codetermination, European countries have high baseline levels of worker participation. Surveys of European managers suggest that the level of involvement in decision-making between workers with and without formal board representation are comparable.
Voice at Work What Does Codetermination Do? Do Employees Benefit From Worker Representation on Corporate Boards? Conservatives Should Ensure Workers a Seat at the Table Labor Participation in Corporate Policy-making Decisions: West Germany's Experience with Codetermination The Macroeconomic Effect of Codetermination on Income Equality
Benjamin Schoefer Simon Jäger Jarkko Harju Shakkad Noy Ola L. Vestad Peter Nilsson Magne Mogstad Christine Blandhol
Codetermination
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