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What can we learn from Germany?

  • 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
  • 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

Reasons for and benefits from Germany's economic success:

  • 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, compared to $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

Abstracted from Dave Johnson's Germany's economy shows government interference works, Campaign for America's Future, January 9th, 2011.