Archive for April, 2011

Germany: country profile

Dave Johnson in his article, “Germany’s Economy Shows Government ‘Interference’ Works,” makes a valid point that the United States’ reluctance in making adjustments within the market has further solidified the exclusivity and position of the upper class. The true interference, Johnson holds, is the manner in which the larger businesses in the United States inhibit productivity and competition from smaller companies. Johnson exerts Germany’s system as an exemplary remedy. Germany’s cohesion between the government and the labor force has sustained Germany as an exceptional economic case even during a time in which most economies struggle to stay afloat. To Johnson, there is an apparent connection between Germany’s esteemed productivity and its health care, higher education, child care, and pension systems. Germany has sustained higher wages for employees, closer union ties, and closer cooperation between the industry and government sectors. Johnson implores his readers to consider Germany’s case carefully and to compare it to our case here in the U.S.

Highlights to the reasons for and benefits from Germany’s economic success are outlined below:

  • Industrial development policy that favors some manufacturing over others. The government is currently helping promote green manufacturing, for example.
  • Very high worker incomes and benefits
    • Hourly manufacturing compensation (wages plus benefits) was $48 in Germany in 2008, the most recent year surveyed by the Bureau of Labor Statistics, while it was $32 in the United States.
    • Six weeks vacation, by law
    • Health care: German “Medicare-For-All” takes the expense of health care off of the people and businesses; giant insurance companies play no role, allowing more personal income and more for business investment
    • Receive child care and pensions.
  • Strong unions: Germany requires worker representatives to hold seats on the boards of directors of companies, depending on the number of workers, so the companies take the interests of workers and communities into account.
  • Investments in worker productivity with government-funded research, vocational training, and policies to retain skilled workers. As a result, they have higher productivity.
  • Fossil fuel businesses have little influence, and German policy is successfully reducing GHG and increasing energy efficiency.
  • German tax policy prevents transfer of wealth to the wealthy, rather than mandating it.