¡Qué distinta es del resto de Europa! No tienen nada que ver. ¡Qué poco nos parecemos! ¡Qué líderes políticos tan sabios tiene!
Workers Made Germany Into the World's Best Economy
Let's hope U.S. policy makers have woken up to the fact that the country is in a period of sclerosis, where its economic institutions seem to be inefficient along a variety of fronts. When things aren’t working, one good idea is to look around and see which countries are doing better. Right now, Japan is one such country. But in many ways, Germany looks like the most successful economy in the developed world.
This wasn’t always the case. It was a German economist who coined the term “Eurosclerosis” to describe the slow growth that plagued the country from the 1980s through the 1990s. In the late 2000s, even as the U.S. economy boomed, Germany’s unemployment rate exceeded 10 percent:
Down From the Mountain
German unemployment rate
Source: Deutsche Bundesbank via Bloomberg
But almost a decade after the global financial crisis, the country has found its legs. Unemployment is down. Labor force participation has risen steadily. Wages have gone up as well, outpacing the U.S. since the 1990s and looking healthy in recent years.
This stellar performance comes even as Germany faces many of the same challenges as other rich countries. Its fertility rate is low -- just 1.38 children per woman, even lower than Japan. And its population is slowly shrinking. That means that a smaller and smaller base of German workers has to support a growing number of retirees.
Germany also hasn’t escaped the global productivity slowdown. Like other rich countries, it’s struggling to produce more from the same amount of resources.
And Germany has also been dealing with the challenge of automation, possibly even more than the U.S. Only Japan has substantially more industrial robots than Germany:
Mechanical World
Industrial robots per 10,000 manufacturing workers*
Source: SingularityHub
*As of 2009
If, as some now claim, robots are a big threat to jobs and wages, German workers should be suffering; instead, their wages have been growing at a steady clip, even as employment has risen.
What is Germany doing right? The country has a very large state sector, generous welfare spending and a trade unionization rate almost twice that of the U.S. Though the country did undertake a few free-market reforms in the early 2000s, there has been no major wave of deregulatory mania. Nor did Germany escape the 2008 financial crisis or the Great Recession, both of which hit it hard. In fact, political and financial instability in the European Union probably was a drag on the country.
A new article by economists Christian Dustmann, Bernd Fitzenberger, Uta Schönberg and Alexandra Spitz-Oener proposes a theory for the German revival. Essentially, they say, it’s all about exports and unions.
The authors note that Germany’s exports have increased steadily:
What Germany Makes, the World Takes
German exports in billions of euros*
Source: German Federal Statistical Office via Bloomberg
*Not seasonally adjusted
Though the country accounts for less than 5 percent of global output, it has about 9 percent of world exports. Sales to other countries account for about half of Germany’s gross domestic product -- more than twice as much as for China.
Why is Germany such an export powerhouse? Dustmann, et al. attribute it to the country’s wage competitiveness. In Germany, wages are set by collective bargaining at the industry and regional level, rather than at the company level as in the U.S. According to the authors, German unions’ willingness to hold down wages led to lower production costs in Germany, allowing the country to export more.
And although it may seem counterintuitive at first glance, limiting wage gains eventually led to faster wage growth. Think about it. Companies deciding where to produce things have to base their decisions not just on today’s wage level, but on their expectations of future wage changes. German unions’ willingness to contain or forgo raises in bad times could act as an insurance policy for companies in good times, making them feel safer about building expensive factories and making risky long-term investments in the country.
But there are also other, more troubling explanations for Germany’s performance. The country’s exports have not been matched by imports -- Germany runs a very large trade surplus. Under normal conditions, economists believe that if a country runs a trade surplus, its exchange rate should rise to cancel out some of the imbalance. But Germany is part of the euro zone, most of which is in an economic slump. That slump holds down the euro’s exchange rate against that of many other countries, making German exports cheap. Also, the unified currency doesn’t allow the exchange rates of slower-growing countries such as Greece or Spain to fall against Germany, meaning that Germany gets a boost to exports within Europe.
Some of Germany’s export competitiveness, then, might be coming at the expense of other countries. And some might depend on other European nations being in a slump. Those advantages would be either unhealthy or temporary. But if Germany’s success really is due to its unique method of collective bargaining, other countries -- especially those with large persistent manufacturing trade deficits, such as the U.S. -- should think about ways to emulate the German system’s advantages.
Abrazos,
PD1: Somos tan distintos a como empezó todo…
El problema de la actual Europa es que nació en un momento en que nada se parece al actual: ¿en qué se parecen 1957 y el 2017?. Entonces todo eran esperanzas, deseos, posibilidades de hacer negocios, y necesidades por cubrir y deseos por saciar. Con el tiempo, aquellos que firmaron aquel papel en Roma metieron –por mero interés–, en el grupo a otros y hoy las diferencias reales entre aquellos y estos se han vuelto más abismales porque ya no hay expectativas.
Porque la realidad es tozuda. Son miembros del mismo club pero, ¿qué tienen en común Dinamarca, España, Polonia, Francia, Rumanía y Holanda?, pues absolutamente nada.
Mientras el mundo fue bien, mientras se alimentó la ficción de que el riesgo de Grecia y España eran prácticamente los mismos que los de Bélgica y Alemania, todo fue bien: el dinero fácil corría y los beneficios aumentaban. Atrás había quedado aquella ‘Europa de geometría variable’ de mediados de los 90 cuando, tras firmado Maastricht, empezaron a verse la diferencias.
Pero hoy, en plena crisis sistémica, todo está saliendo a la luz. Lo de la geometría variable se ha abandonado porque quedaba mal, ahora se habla de ‘varias velocidades’. Polonia y esos países del Este de Europa que jamás debieron haber entrado en la UE como entraron se encuentran con la realidad pura y dura: que ellos no son como los demás y que los recursos son limitados porque todos tenemos problemas. (Y España calladita porque tampoco debió se haber sido metida en el euro como lo fue).
Esos países interesaron en su momento, pero ya cada vez interesan para menos cosas; por lo que cada vez habrá menos dineros para ellos y los demás tratarán de poner tierra de por medio. Cuando todo va bien, las cosas van, pero cuando deja de ir bien …
PD2: Aunque sufrió muy fuerte la crisis de 2008, se repuso. Y las previsiones (IFO) son muy positivas ahora:
No obstante, le costó mucho brillar en la década de los 2000, frente a otros países que iban disparados:
Al no sufrir tanto la crisis (no habían tenido burbuja inmobiliaria, aunque si sufrieron un fiasco en su sector bancario y de cajas de ahorros), pudieron salir con toda la fuerza del mundo:
Y a diferencia de Francia, aplicaron una gran austeridad (lo que pidieron a los demás países europeos y casi ninguno logró), y acabaron sin déficit público:
Este año su deuda pública entra en zona Maastricht, por debajo del 60% del PIB:
Su único pero, es que dependen de los demás, venden tanto fuera que son los grandes acreedores del mundo:
Junto con China y Japón, contra EEUU y el Reino Unido:
Estos son los países que más exportan:
Y su imagen es fabulosa:
Con un 21% del peso de la industria:
Ha dejado atrás al resto de Europa:
PD3: Dios quiere que todos los hombres se salven. El infierno existe pero no lo quiere para nosotros, solo quiere lo mejor. Nos ha estado avisando de cómo evitarlo. Cristo murió en la cruz para salvarnos. Si hacemos algo mal, y nos arrepentimos, Él nos perdona. Ha hecho todo lo posible para que nos salvemos, pero no puede obligar a los hombres que, con nuestra total libertad, elegimos el camino de amarle e ir a su encuentro…
