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by lampenrad
3195 days ago
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Here are the labor costs compared to other nations from '00 to '11:
https://cdn.static-economist.com/sites/default/files/imageca... They might've grown above EU average since then, but they certainly got some catching up to do. Real wages have increased since '07, yes, but that was also the lowest year in decades. The fact is, that it's barely above where it was 25 years ago:
http://www.bpb.de/cache/images/7/61767-1x2-article620.gif?FF... And I don't see, how the reunification of Germany would've caused real wages in '07 to be lower than in '93. I'm no economist, but Hartz 4 and the Agenda 2010 in general seem like a more plausible cause to me. |
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Several reasons. The botched currency union led to inflated wages (in no relation to productivity) in East Germany in conjunction with the Treuhand mismanagement to Germany being the sick man of Europe, with unemployment rising to 10%+. To this day, employees in East Germany earn about a quarter less than in West Germany. Production was outsourced to Eastern Europe, and Eastern European workers started to compete with German workers. You may remember that Volkswagen went from a 5-day to a 4-day week in late 1993 with a proportionate reduction in wages to save jobs. Wages are not immune to the laws of supply and demand, and consequently they stagnated. Reunification was an economic disaster and it took Germany a long time to recover from that.
> I'm no economist, but Hartz 4 and the Agenda 2010 in general seem like a more plausible cause to me.
Except that they've pretty much constantly grown since then, except for recessions. That's an indisputable hard fact. Real wages stagnated between 1990 and 2007 and have been rising since then. Whether there's a causal connection between Hartz IV and the rise in wages is something that nobody knows, but given that Hartz IV was introduced in 2005, it pretty much could not have had an effect before then, barring a time machine.