The High Cost of Germany's Economic Success

[marmar]

from Der Spiegel:


Countries around the world envy Germany's economic success and look up to it as a role model. But a closer look reveals a much bleaker picture. Only a few are benefiting from the boom, while stagnant wages and precarious employment conditions are making it difficult for millions to make ends meet. By SPIEGEL Staff

What a year it's been for carmaker Audi and its employees, a year marked by the biggest profits in company history, a bonus in the millions for its chairman and handsome bonuses for many employees -- though little to nothing for those at the very bottom of the pay scale.

Technically speaking, Nadja Klöden isn't even at the very bottom of the hierarchy at Audi, which is based in Ingolstadt, near Munich. She's on the sidelines, yet also in the thick of things. The 28-year-old, who studied business management, works as a project assistant in administration. But her employer is BFFT, a service provider that organizes parts distribution among the Volkwagen Group's subsidiaries, which include Audi. That's why Klöden earns €800 ($1050) less than comparable Audi employees for the same 40-hour work week. In other words, although she contributes to the success of the company, she doesn't directly benefit from it. She receives neither an Audi-level salary nor any bonus whatsoever.

Helen Kozilek is in a similar situation. The 26-year-old works full-time on the assembly line at Audi, but the carmaker doesn't pay her wages. Instead, she is paid by Tuja, a temporary-employment agency and subsidiary of the Swiss temp giant Adecco. Compared with Klöden, however, Kozilek can consider herself a higher earner. The hourly rate for temporary workers in her salary group is normally about €10. But IG Metall, Germany's leading metal workers' union, has signed a wage agreement with Adecco so that Kozilek benefits from the €16 rate negotiated by the union. Still, Kozilek doesn't receive a bonus. ...............(more)

The complete piece is at: http://www.spiegel.de/international/business/0,1518,830972,00.html

[bemildred]

1. Quite a contrast with our "Free Market" dogmatists, isn't it. nt

[Populist_Prole]

2. Good read indeed. Honest analysis. Quite different than I expected.

When I saw the title, my first hunch was that it was a WSJ, other business piece, chiding Germany's "coddling" of its workers deprives the investor class of a bigger take. That or how they are too industrialized instead of jumping on the offshoring and financialization bandwagon the US practices. I've seen enough of that talk from the business press. This article is is excellent. Gives a big picture.