The controversy regarding labor reform legislation continues. Due to a strained relationship over differences between the Tripartite Commission and the Government, it seems unlikely that an agreement will be reached. As its reform has had difficulties from the beginning, labor reform cases occurring overseas are now getting attention.
The German economy is specifically mentioned as its economic growth rates are plummeting, and the unemployment problem has gotten more serious since 2001. In Schroeder, Chancellor Merkel who is in power and Peter Hartz spearheaded reform in areas including welfare, the labor market and taxation. The Hartz reforms starting in August of 2002, was implemented in four stages. During the first stage, to increase part-time jobs, the reform eased existing regulations. During the second stage, it vitalized the creation of small-scale income jobs. Through these reforms, the German GDP increased, and its annual growth rate increased from -0.2 percent in 2003 to 3.0 percent in 2006. At the same time, however, a deepening polarization of wealth increased in the country as unemployment benefits were decreased.
The United States and the United Kingdom also spurred labor reform packages. Real wage increases for low income workers is the main goal for both countries. Independent contract worker in the U.S has grown rapidly. Responding to this circumstance, the government forced subcontractor to enter collective agreements directly with their respective head offices. Also franchise headquarters should treat subcontractor as ‘joint employers’ if they do only indirectly manage them.
The U.K. has decided to introduce a ‘living wage’ instead of the ‘minimum wage’ in April 2016. The concept of a living wage means that a worker’s earnings are dependent on living costs, and allows workers and their families to earn enough to live a basic life. In the case of minimum wage, only 5 percent of the work force or approximately 1.2 million people are benefiting from it but if a living wage system is introduced, over 6 million workers will benefit from it according to the British government.