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How Germany Builds Twice as Many Cars as the U.S. While Paying Its Workers Twice as Much
In 2010, Germany produced more than 5.5 million automobiles; the U.S produced 2.7 million. At the same time, the average auto worker in Germany made $67.14 per hour in salary in benefits; the average one in the U.S. made $33.77 per hour. Yet Germanys big three car companiesBMW, Daimler (Mercedes-Benz), and Volkswagenare very profitable.
How can that be? The question is explored in a new article from Remapping Debate, a public policy e-journal. Its author, Kevin C. Brown, writes that the salient difference is that, in Germany, the automakers operate within an environment that precludes a race to the bottom; in the U.S., they operate within an environment that encourages such a race.
There are two overlapping sets of institutions in Germany that guarantee high wages and good working conditions for autoworkers. The first is IG Metall, the countrys equivalent of the United Automobile Workers. Virtually all Germanys car workers are members, and though they have the right to strike, they hardly use it, because there is an elaborate system of conflict resolution that regularly is used to come to some sort of compromise that is acceptable to all parties, according to Horst Mund, an IG Metall executive. The second institution is the German constitution, which allows for works councils in every factory, where management and employees work together on matters like shop floor conditions and work life. Mund says this guarantees cooperation, where you dont always wear your management pin or your union pin.
Mund points out that this goes
against all mainstream wisdom of the neo-liberals. We have strong unions, we have strong social security systems, we have high wages. So, if I believed what the neo-liberals are arguing, we would have to be bankrupt, but apparently this is not the case. Despite high wages . . . despite our possibility to influence companies, the economy is working well in Germany.
http://www.forbes.com/sites/frederickallen/2011/12/21/germany-builds-twice-as-many-cars-as-the-u-s-while-paying-its-auto-workers-twice-as-much/
http://www.dailykos.com/story/2011/12/22/1047995/-Germany-Explodes-Republican-Myth?via=siderec