The New York Times did a piece today.....on the German worker, his income, and how a stalled pay scale is disrupting Europe's economy itself today.
What they say....is generally correct. For an entire decade....2000 to 2010....the after-taxation income was stagnant.....a grand total for ten years of a 1.4 percent gain. That's NOT yearly.....that's for the entire decade.
From 1990 to 2000? Well, it just barely gets any better, with a 7.5 percent gain, for the entire decade. Again, that's NOT yearly.....that's for a ten-year period.
What the Times piece tries to do....is make the case that German workers should have been taking one to two percent gains every year or two.....like French or Italian or Spanish workers. The slanted story suggests that if middle-income Germans just made more....they'd spend more. They'd buy French wine, Greek summer vacations, Spanish washers and dryers, Italian sports cars, etc.
It's a nice suggestion, and perhaps a topic worth discussion.
Some faults are found in this logic though. For hundreds of years....Germans have been working on this personal habit of practical management of income. Debits and credits are balanced. No one spends money they don't have. If they made more money....it doesn't really mean they'd spend more money.
When you sit back and examine the past decade.....Germans across the country saved money. Even with the crappy 2008-era with bad US banking situations and some Germans losing savings....the Germans simply didn't fall the way that the US or it's European neighbors fell.
When Greece fell into the pit and asked the EU for serious help, and the EU kinda said it wasn't going to be guaranteed thing....especially with Italy, Spain, Portugal and Ireland in trouble. Who did have money? Germany. Yeah, the guys who took less pay.....the guys who made it a life decision to run balanced checkbooks.....the guys who skimped and saved on home renovations by often doing the work themselves or hiring Polish under-the-table workers.
Yeah.....somehow, those Germans had cash still in their hand....when everyone else didn't.
Stagnant employment situation? No. Germany is actually accepting workers from Greece, Spain and a number of European countries. By the time you figure benefits and leave.....no one really complains that much. Maybe it is less pay.....but you consider roughly five weeks of vacation, a pension program that is stable (for the moment), and almost no company downsizing.....there's a success story here.
How does the logic go with the Times article? It's hard to say. Somehow, I'm supposed to believe that less German-worker pay hurt Europe. Yet, their companies are surviving.....no one is Greece is complaining about ample German cash reserves and savings (yeah, they complain about Nazi history but that's another story).
Germans satisfied? Now. Just this week in my village....another round of the bus-driver strike is affecting me. No bus service into Wiesbaden tomorrow. And there's the chances of another day of strike next week. Strikes are becoming commonplace as workers sit and demand a 1.5 to 2.5 percent raise.
I'm not sure what the Times was trying to tell in the story. Maybe some slant belief item from the commerce or state department? Maybe. A foundation goofball with a Nobel Prize for Economics chatting up to a Times reporter over theory? Maybe. It's just another case where you really have to read through the stuff printed as news today and ask stupid questions.