Tuesday, November 1, 2016

The German Debate Over Pay

Last night, state-run ARD ran Money-Check at it's prime-time hour (8:15 PM).  Money-Check is generally an interesting show because they go and talk for about 45 minutes on how the economy functions, how pricing works, if you are getting a good deal on wine, etc.  So the topic last night was: Who earns what they deserve?

German society is divided.  An awful lot of Germans are unhappy about their pay situation.  They feel as though it's unfair and not giving them their 'fare-share'.

I will admit, the reporters did a fair job with the various sub-topics from this discussion.  They more or less proved that education level has a lot to do with where you are in life as a German.  They also talked a good bit over CEO levels of pay.....suggesting that something has to be fixed, although any attempt to rein in CEO pay will simply drive companies to base their headquarters outside of Germany and avoid this type of government meddling.

If you wanted to watch the piece?  It's up on their site for the next month: here.

As an American observing the situation, I will offer three observations.

First, to be competitive and keep business operations going in the world economy.....for at least two or three decades....German companies and the government itself have acted together to keep wages at a stationary point.  You can easily find people who've spent thirty years at some company and maybe only seen three or four pay raises.  If you work via a union deal....you generally see a pay-raise every three years.....without the union, much less so.  Between the cost of living and these marginal pay-raise situations...I think Germans are correct in their unhappiness, but if you go and raise your rates and try to compete with other countries....you will find products too costly and thus bring unemployment to Germany (something even worse than complaints about pay).

Second, a lot of this talk often leads back to wealth redistribution.  Some political players would like to find other methods of taxation or attaching wealth of companies.....to remove it and distribute it to the lesser in society.  The thing is....there's always a middle man with an agenda and just handing 'cash' to the guy never seems to be the goal.  There always seems to be some program (with more cost added) and more services (more cost added) to just burn up the bulk of this idea. And even if you handed every single German who makes less than 25,000 Euro a year a check for 1,500 Euro.....what exactly will he spend it on?  New tires?  A weekend at some casino?  A used RV trailer?  No one can cite any study to show how cash gets spent in a case like this, and I think even if they did a study.....it might prove that handing cash over doesn't settle any problem.

Third, by the end of this show.....I came to note that they had examined at least thirty different occupations and talked a great deal about particular ones.  Strangely enough.....journalists were never brought up.  It would be curious to know what ARD is paying its journalists out of the state-run TV tax bucket.  But I guess it's best not to ask that question.

So, if you had some knowledge of German, and 40 minutes of time....it's an interesting show and at least asks a lot of questions.

1 comment:

Frank Stiner said...

I left Germany 11 years ago as they tax the hell out of you, the health system is corrupt and poor quality.
When I left Germany I had literally nothing in my bank account.
Now I am earning 3 times what I got in Germany, have a career path, work in a high quality health system which costs a tenth compared to Germany, and have a high reputation in the population. The climate is excellent, too.
The Germans believe in obedience and think something will trickle down to them. Together with the attitude that they live in the best country of the world blinds them to see the reality.

Cheers

PS: Love you site btw, great observations and writing...