Good Wages, Unions and Government Regulation Are The Solutions, Not Causes, of our Economic Woes

[pampango]

Can we compete with China's wages? Does government interference and regulation hold us back? Are our unions keeping us from being competitive? Do we need to lower our standard of living in a race to the bottom? You might be surprised to learn that Germany pays higher wages, has strong unions, has much more government involvement and is doing better as a result. Conclusion: our wages, unions and government are not the problem, they are the solution.

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. Yet Germany is an export giant, while we are the colossus of imports.

In Germany, workers also get six weeks vacation - by law, federally mandated, a right. They get health care, university, child care and pensions and as a result they have higher productivity. In Germany, the government requires worker representatives to hold seats on the boards of directors of companies, depending on the number of workers. Government-funded research and vocational training, and policies to retain skilled workers bring another competitive advantage.

The result of all this government interference is that Germany's export-oriented manufacturing economy recovered from the recession and is doing OK, and their workers are paid well and have great benefits.

http://www.alternet.org/economy/149305/good_wages,_unions_and_government_regulation_are_the_solutions,_not_causes,_of_our_economic_woes/

[PDJane]

1. Precisely.

And yes, social democracies tend to do better.

[FarLeftFist]

2. K&R!

[The Magistrate]

3. Hear Hear, Sir!

[Puzzledtraveller]

4. NAFTA

[pampango]

6. Germany (and the rest of the EU) has a "free trade" agreement with Mexico and is negotiating one

with Canada.

[SlimJimmy]

5. I would wait a month or two before I shouted from the rooftops.

The result of all this government interference is that Germany's export-oriented manufacturing economy recovered from the recession and is doing OK, and their workers are paid well and have great benefits. [/div class]

Germany may be on the brink of recession after the sovereign debt crisis caused the economy to contract in the final quarter of 2011.

Europe’s largest economy shrank “roughly” 0.25 percent in the fourth quarter from the third, the Federal Statistics Office in Wiesbaden said today in an unofficial estimate. Economists such as Christian Schulz at Berenberg Bank expect gross domestic product to contract again in the current quarter. A recession is defined as two consecutive quarters of declining GDP.

http://www.bloomberg.com/news/2012-01-11/germany-on-brink-of-recession-as-sovereign-debt-crisis-weighs-on-exports.html
[/div class]

[pampango]

7. Germany is not immune to recession or other economic problems. They export a lot and import

a lot so they are tied to the health of other countries' economies.

Germany's unemployment rate at record low in December

http://www.bbc.co.uk/news/business-16390429

German unemployment fell to its lowest rate in December since 1991, according to the German Federal Labour Agency.

The adjusted jobless rate fell to 6.8% from 6.9% in November, the Federal Labour Office said. This marked a new record low since figures for unified Germany were first published.

Leading economists expect Germany's economic growth to slow in 2012, however, in line with other major eurozone economies, which may put a squeeze on wages and jobs.

But, as the BBC's Berlin correspondent Stephen Evans points out, unemployment at a record low for the last two decades is something most countries would envy, and a sign of the way Germany has rebuilt itself since the Wall came down.

[SlimJimmy]

8. I agree, but would still wait until the 2nd quarter to see how their economy is shaping up.

[Rochester]

9. Solidarity forever, K. & R.!