Public sector strikes throughout Germany in 2008

Aplogies - I'm the one who struggles with arithmetic !! What an a*** I am !
I was trying to do the usual male thing of writing and talking to someone else at the same time.
I accept all ridicule.

Although you have given only one example, and it is of an completely unskilled job, I certainly do not want to see someone working for 2 or 3 euros per hour; however, they did so willingly, correct? That means that there is a certain level of supply of labor at that wage to work those particular jobs, i.e., a voluntary contractual arrangement. Presumably if the employer had to pay 7,50 euros or more per hour, most of these jobs would not exist at all.

BTW, are we talking about people working illegally in these jobs, or not?


Not having received it, not being someone who disburses it, and not being a labor economist who specializes in this area, I suppose I can be forgiven for not knowing. Please feel free to enlighten.


Negative-income tax is what you call a "top-up" payment. It is better than a minimum wage because it doesn't have the drawbacks of a minimum wage (primarily the tax wedge on labor). Just curious, but are you completely against any tax breaks or subsidies for industry, especially those tied to the creation of a specific number of jobs?

No time like the present to clarify this. Are any Bundestag or Bundesrat members paying anyone working for them 3 euros per hour?

Come on ... voluntary is open to interpretation under sets of circumstances and not to be confused with there being no other choices. If I need a job to achieve an income at all, and the only job I can get, which I must from necessity accept, we can't really call this voluntary. For me voluntary implies the possibility of choice.

Working illegally ? A moot point: these people were being employed under the 400 Eur rules, which caps the earnings amount among other things, but also restricts the number of hours. However many people working under such arrangements are socially weak and potentialy open to oppression. So they end up being forced, at the risk of having no job at all, to work more hours than the law allows, but not to earn any more pay for doing so. Yes illegal, and for both parties, but the impetus came from the employer.
On the social security levels I'll send you a table. It's not on this machine. For a couple with one child it's about Euro 1200- nett, well in excess of what Euro 4,50 / hour would bring.
"Top up Payment" paid for by the state presumably. In Germany that means the middle-earners. Yes, I'm agin it.
No, I'm not completely against tax-breaks or subsidies, but in the case of small business start-ups I think it would be far more constructive to offer assistance with social security payments, for say 2 - 3 years. In my experience the level of such obligations in Germany is one of the main reasons that there are so few very small business in comparison with other countries.

Just for the record:

I'd also reform the Berufsgenossenschaften, and in some cases disband them.
I'd disband all state media with the exception of Phoenix
I'd carry out a full analysis of the service/cost relationship in the health industry.
I'd compel all members of parliament to reveal all sources of income
I'd press for reform and possibly disbandment of the horribly expensive federal system which simply replicates costs.
and so on ad infinitum ... but most importantly I'd ask one fundamental question:

In one of the world's largest economies, a large section of society including those in decently-paid jobs, have begun to strugle in recent years, to be able to:

pay their rents including all ancillary charges
pay their health insurance charges;
pay their energy bills;
fill up and drive their cars;
provide adequate education for their children
to provide secondary education for their young people;
enjoy a reasonable pension after working for x years.

Where does all the money go ?

Being able to answer your question immediately is the ideal I aim at. Unfortunately, until very recently, Members of the Bundestag were not obliged to reveal anything about their souces of income or their external affiliations. The only state parliament with such legislation was Niedersachsen, and because of the non declaration of income of 2 MdL & VW AG the matter came to public awareness and changes were made but they are very new and most relationships are still not clear. That said, the term "self-seeking hypocrisy" was directed at the Union as the party of Industry & Commerce generally, which is presently desperately trying to distance itself from people like Klaus Zumwinkel, and not specifically at individual members

OK, breaking the law is an entirely different matter, although you yourself in citing this, have referred to it as a few "extreme cases" meaning it is not the norm, thus as DR points out, raising everyone's wages is a blunt tool for handling a violation of law. Did the workers know that they were violating the law?


So, there could be two people working, and does that 1200 euros include Kinder- or Elterngeld?


So you would prefer that people be unemployed (and you paying for their dole)?


So what is the difference between subsdizing through the negative income tax or via reduction in social security payments, from your point of view (I have already mentioned the tax wedge on labor).


While members of the Bundestag should disclose all sources of income for a number of reasons, I fail to see how that or abolishing the federal government is going to help make the cost of living more affordable.

If you are in a decent-paying job in Germany, why would you have trouble paying for health insurance?
Petrol is always expensive in Germany.
What you are complaining about with regards to education in Germany makes no sense. Access to secondary education? It's free!
If they are still working, they're not collecting a pension yet, right? It is the demographics and slow domestic growth in Germany that are the real threat to pensions (as well as inflation).

TBH, some people will always be at the margins of society no matter how much is done for them. It is not clear to me what you are so excised about- a few extreme cases of violating the regulations of 400 euro work? Come on, TG. Get real. Liberalizinbg the economy will over the long term ameliorate many, if not all, of these problems for most people.

OK, breaking the law is an entirely different matter, although you yourself in citing this, have referred to it as a few "extreme cases" meaning it is not the norm, thus as DR points out, raising everyone's wages is a blunt tool for handling a violation of law. Did the workers know that they were violating the law? Seems to me only the employers were/would be punished (as it should be).

No one forced them to take this job, right? No, thus it was voluntary. How many people are we talking about anyway?


So, there could be two people working, and does that 1200 euros include Kinder- or Elterngeld?


So you would prefer that people be unemployed (and you paying for their dole)?


So what is the difference between subsdizing through the negative income tax or via reduction in social security payments, from your point of view (I have already mentioned the tax wedge on labor).


While members of the Bundestag should disclose all sources of income for a number of reasons, I fail to see how that or abolishing the federal government is going to help make the cost of living more affordable.

If you are in a decent-paying job in Germany, why would you have trouble paying for health insurance?
Petrol is always expensive in Germany.
What you are complaining about with regards to education in Germany makes no sense. Access to secondary education? It's free!
If they are still working, they're not collecting a pension yet, right? It is the demographics and slow domestic growth in Germany that are the real threat to pensions (as well as inflation).

TBH, some people will always be at the margins of society no matter how much is done for them. It is not clear to me what you are so excised about- a few extreme cases of violating the regulations of 400 euro work? Come on, TG. Get real. Liberalizing the economy will over the long term ameliorate many, if not all, of these problems for most people.

Of course it's not the norm, but it is reality for large numbers of people.


Kindergeld is included in assessing this need. What's not included is rent, which is payable separately and heating costs. If we add those into the figure given we acheive a much higher "subsistence" level which makes the disparity between Euro 4,50 / hour and the state determined minimum needed to live even greater.


I'd prefer them to be in meaningful employment, the reward of which is sufficient to cover normal living costs. If that's not possible I'd prefer them to be unemployed and me paying their dole - PROVIDED that's what they also want.


The tax liability for the relatively low paid is small in comparison to the social security contributions.
To turn the Finanzamt into the Social Security department is less than fair to other "clients" of the revenue.


I didn't say it would. But it would allow me and others to asses on which basis the decisions are made, which may influence behaviour at the next ballot.

<< If you are in a decent-paying job in Germany, why would you have trouble paying for health insurance? >>
Typical health insurance payments run between 13.5% - 14.4% of gross earnings. Top levels are about 15.4 % and lowest levels about 12.2% but bring with it a lowering of services. Pay less, get less. Add to this unemployment insurance, pension insurance and additional care insurance.


This is a relatively recent phenomenen. Germany had cheap petrol, by european standards, until Schröder needed to appease the Greens in the Red/Green coalition. That began the rot. The rest followed when Mr Bush and co. wrongly assessed the world market's development and told us he was securing our fuel supply in Baghdad.


Paid for by parents, students or Bafög


Germans enter into a so-called "generation-contract" with the state which says they pay in, they'll get so much. The state, having seen it won't be able to meet it's liablilities, alters the contract uinlaterally and retrospectively. This is unnacceptable.


I am talking about a slow process, occurring since the mid-nineties, by which levels of earnings have dropped in response to calls for solidarity to make us competitive with other parts of the world. Sadly Schröder was hoodwinked by the world of business and went along with this. At the same time during this process, business began to flourish and to produce huge profits, which were re-invested in those economies with which were wesupposed to become competitive, making us once again uncompetitive. So the spiral went, and still goes, except that the sacrificees have begun to get wise. Let me make this very plain. I'll work for Bulgarian wages if I can pay a bulgarian rent, bulgarian taxes and the whole gammutt ! If It's not possible to achieve a reasonable, living wage in Germany, then we should just shut up shop and move on.


When you have time, please tell me, in detail, what you mean by liberalising the economy. Please don't offer solutions based upon other economies.
Please base your concrete suggestions upon this economy.

Thanks for the chat - I must get on with other things, but I really would like to hear (or see) your suggestions .

How many, i.e. how many people who are living in Germany legally? If you are going to complain about something you need to be able to quantify just how much of a problem it is rather than just tossing out an anecdote or making a vague statement.


So, that's 1200 beyond rent and heating costs. If that includes Kindergeld, I think that still leaves a bit over 1000 euros. Someone is Tax Class III would need to make a bit over 1300 euros a month Brutto to make that Netto even if someone else were paying their rent and heating costs. If we assume working 21 days a month, eight hours a day that implies a wage of over 7,50 euros for this family having a single wage earner and someone else paying their rent and heating costs! That's not realistic. Let's assume rent and heat are 600 euros a month, so a bit over 1900 euros Brutto would be necessary to meet that standard! 1900 euros Brutto implies a Brutto hourly wage of 11,30 euros! Dream on.


See above, then keep on dreaming.


You don't know how the negative income tax works. At any rate, if the social security contributions are so onerous that you want to exempt some businesses, doesn't that suggest wholesale reform is necessary?

I didn't say it would. But it would allow me and others to asses on which basis the decisions are made, which may influence behaviour at the next ballot.
That's non-sequitir to a discussion on minimum wage and poverty. Transparency in government is usually good and is also usually a unicorn.

<< If you are in a decent-paying job in Germany, why would you have trouble paying for health insurance? >>
Typical health insurance payments run between 13.5% - 14.4% of gross earnings. Top levels are about 15.4 % and lowest levels about 12.2% but bring with it a lowering of services. Pay less, get less. Add to this unemployment insurance, pension insurance and additional care insurance.
Once again, if you are making a decent salary, this should not be unaffordable, unless of course you want to dismantle the social system altogether because of its lack of affordability.


.
http://64.233.183.104/search?q=cache:DsBg2...t=clnk&cd=7

Draw your own conclusions. I am American, BTW, so petrol prices in Germany never seemed cheap to me. However, notice that in real terms prices were essentially the same in Germany in 2002 as they were in 1990.
As for the eco-taxes pushed by the Greens, they are indeed regressive. Nothing to do with the discussion about a minimum wage.


Sounds like an argument against the welfare state, especially when demographics are unfavorable. What do propose, huge tax increases?


Once again, no numbers provided. The answer lies in part with the Real Effective Exchange Rate. I don't have time to go further right now. More when time permits. In the meantime you might want to think about the effects on German wages of EU Freedom of Movement, enlargement of the EU, and globalization. It is completely unreasonable to expect that these huge factors would not affect German real wages. Your complaints seem to be about government policy above all else. Surely a very high government-enforced minimum wage won't make government policy effective?


When I have time, sure.

I have my differences with him big time but I beleive speaking in Munich last week, Oskar Lafontaine called for MwSt reductions on good that were specificly related to children.
I THINK he meant stuff like toys and boos and school equipment.
But you can see the direction he was arguing in.
Remove MwSt on foodstuffs, good idea.

And as for a nimimum wage killing jobs, lets look across the English Channel to that European beacon of a de-regulated economy.
Knut that he was on other areas, Blair's introduction of the national Mimimum Wage in the UK lifted people out of poverty and unemployment didn't go up.

One of the richest economies in the world can't afford to pay people doing socially essential jobs a decent living wage?
Maybe if the bosses weren't siphoning profit out of the system or the government throwing our money into a bottomless pit when banks fuck up the money would be there?

The UK's strong economic performance (read mostly strong performance of its finance industry and also consumer spending) since 1997 pulled people out of poverty, the minimum wage was largely irrelevant as a result. The situation is somewhat different in Germany, which has a weaker domestic economic base than the UK. I have explained this to you before, MT. Yes, being less regulated than Germany also helps the UK in some areas.

Free marketeers are just as interested in reducing poverty as wackjob far left types profess to be. We just want to make sure it is as sustainable as possible and doesn't have nasty side effects such as an inflationary spiral (which BTW disproportionately hits the poor and pensioners).

MT, are child care providers and housekeepers "socially essential jobs"? Where in the world do people doing these jobs not make modest or low wages? Nowhere. That should tell you something. Tell us what you think they should be paid and then ask those currently employing them if they would pay them the amount you demand, or if they would let at least some people go. You already saw what happened to the PIN employees when the postal sector minimum wage was instituted. Question answered?

Why should PIN have succeeded with a business model that was purely based on undercutting wages?
The major shareholder of PIN, the Axel Springer Verlag was THE clue. They weren't interested in ther being more business generated or doing business any better.
They were just interested in making greater profit by driving down wages.

Call me old fashioned but I think our society needs decent public transport, kindergartens for children, clean streets and all the other 101 things that make it a decent place to live. And the millions of men and quite specificly women, who do those jobs, should be getting a decent wage for it.

The people I refer to live here legally; in fact they are German nationals. This is not Texas or New Mexico ! There are many reasons for people to fall out of the box here, not least that of having made the decision in the past to be independent, " to give it a go". If it doesn't work first time, this admirable characteristic in other societies has a habit of working against you in Germany. A large proportion of Germany's "long term unemployed" are former self-employed.


Sorry I can't make head or sense of this. The figure of ca. Eur. 1200 whereby Kindergeld is already DEDUCTED, is the approx. subsistence level for a family of 3 made up of parents + child, ie. cost without rent or heating. If we assume rent of say, Euro 400,- and heating costs of, say, 150,- per month, then the state is saying that an income of 1750,- netto is subsistence for a family of 3. Nothing more, nothing less. I have a serious moral problem with "businesses" offering wages below this level. In fact, I'd describe any business offering wages below this level, under these circumstances as camouflaged beggars, expecting to survive from the good will of others. I don't really see where any of the parties involved have much to dream about.


Social Security contributions are onerous. Punkt. I said somewhere earlier that reform is necessary, and on a large scale. I suspect only, that you and I would wish to see different reforms made. I would wish to see reforms that allowed small businesses to start up and grow, without them being crippled by excessive social security contributions from day one. There is new legislation that may help but as yet it's untried and I suspect it looks good on paper but changes little in reality.


.

The operative words here are "if you are making a decent salary". We are dealing with percentages. If I earn 5000 a month and I pay 14% of 5000, I have 86% percent of 5000 left tp play with, a not inconsiderable sum. To drive the message home, if I have 1500 and pay 14% I have a remainder of 86% of 1500 - a somewhat diminished sum. I detest percentages in salary negotiations. A small percentage of nothing is still nothing. The only decent, conservative, wage policy in the UK during the 20th Century was that of the much-maligned, Edward Heath. In either 1972 or 1973 he ruled that every working, man, woman or child would receive a pay increase of five Pounds. Whether Judge, Gigolo, or Juggler, the limit would be five Pounds. That the Thatcherites later condemned Edward Heath to a bitter end on the back-benches is an indication of their own petty small-mindedness.


Thank you for the confirmation. I've been here since 1987. That petrol prices remained stable - and cheap in compariosn with other EU countries - is just as I remember it. Hence my comments.


Agreed !

Aplogies - pissing about with the quotes stuff caused me to lose a section here. I'll continue in another posting.

Good on you !!

You're old fashioned !! But you're also right.

Care to say what you feel that "decent wage" would be for these job categories? TG posits that a family of three needs 1750 euros a month after taxes just to reach subsistence level. That's about 2350 euros per month Brutto. If only one person in the family is working, then that equates to somewhere between 13 and 14 euros an hour Brutto. There are a large number of jobs out there that would disappear completely if one had to be paid over 13 euros an hour to do them, and a lot of small business that would either never be started or would never expand.

It is very easy to piously state someone deserves this or that without taking anything else into account and without doing any sort of quantitative analysis. Are you prepared to may much higher taxes and much higher consumer prices to bring about your Schlaraffenland, MT and TG? The vast majority are not. The model you two profess support for sounds akin to the thinking of the former DDR.

As for PIN, MT, what's wrong with competing on price, i.e., a lower price for consumers? Deutsche Post's lobbying for the minimum wage was an attempt to restrict competition, not an expression of concern for workers.

TG, as for health care costs, the percentages you tossed around assume someone is self-employed. No employee pays anywhere near 14% of their gross salary for health care. I frankly don't know why you are complaining about that- should the wealthy pay for everyone else's health care?

The logic expressed by MT and TG (of lack thereof) never ceases to amaze me. No society can afford to bring its most unskilled and least productive to affluence via diktats to employers or dole payments- it must be worked for. You also completely ignore the serious distortions of price signals that your policies would engender.

Notwithstanding the likes of the multi million tax dodgers that have been exposed since this thread started...

It's always the bogeyman of "would you pay higher taxes" to fund it that is trotted out to try and scare the middle income secton of society.
Heavier taxation of the rich or companies (who currently have some of Europ'e lowest tax rates) could provide funds that would fund such issues AND enable the tax wedge to be cut for the lower paid and middle income sectors. That might not mean increasing the rate of taxation per se but cling some of the loopholes.

Real wages are falling in Germany while profits are increasing.
Working people tightened their belts in the hard times while the bosses kept their snouts firmly in the trough.
Now the money is there, everyone should get a fair share of it.

If I had to choose who was more productive for society, a Kindergärtnerin looking after my nephew or Peter Hartz, ex VW, I don't think it's a hard choice to make.

Just a brief comment on the % v flate rate issues raised above.

The unions try and get round this issue by demanding x % or at least € y rise for every employee.
This benefits the lowest paid who have less material gain from a % increase.

The bosses try and counter this by offering x % plus a one off payment of € y.
That € y increase is NEVER included again then in year on year cumulative increases.

Everyone should pay all of the taxes they owe. Punkt. It's anyhow irrelevant to a discussion on wages because if Zumwinkel weren't currently under investigation you wouldn't feel any differently.


MT, if you think they are willing to pay higher taxes (the middle class) you are mistaken. Sorry, it is a fact that to implement the higher wages for the public sector and expanded social programs you advocate, taxes would have to be raised to pay for it. It is also a fact that middle class people don't feel undertaxed and don't want to pay higher taxes. This is a democracy. so their opinion counts.


I think you would agree with me that a simpler system of taxation that relied a bit less on regressive taxes would be an improvement. You are on stronger ground when you want to cut taxes for the lower and middle classes, but that was promised in 2005 (to be funded by a MwSt increase) by the CDU and the SPD scotched it. Depending on the details, I would support a reform along those lines without increased taxes on capital, a minimum wage being introduced and additional social spending (unless funding for additional social sepnding would come from spending cuts elsewhere, e.g., subsidies to the coal industry).


How about some hard numbers so we can quantify this, MT? Profits aren't necessarily bad- rising profits are the least expensive source of capital for investment and, AOTBE, the higher the profits, the higher the corporate taxes paid- money which can fund social spending.


The German business club obviously isn't a sympathetic bunch, but not every businessperson is a DAX 30 executive. Problem is, there are obvious differences of opinion as to what the "fair share" is, and the "bosses" aren't just going to roll over for you and the Linkspartei. Better to find ways to profit mutually than to mount a cash grab, MT.


Hartz notwithstanding, that may be your opinion, but when everyone's money is at stake their behavior says otherwise.

Shocker Businesses trying to make a profit and trying to negotiate the best wage deal they can (as are the unions).

Pefectly logical, MT, given the rather sígnificant effect those union-demanded increases would have on the employer share of social contributions, especially going forward.

Here's a lovely sexy graphic on real wages in Germany over the last few years:

http://de.wikipedia.org/wiki/Reallohn

Real wages are falling. people are strugglingg against that. Fair play to them.

i have no doubt that real wages are falling. It is an inevitability of the euro and the single market, globalisation etc etc etc.

striking and forcing wage increases is not going to help, though, it will just create a wage/inflation spiral. If Germany really wants improvements in real wages, then they need to accept some radical structural changes to make the economy more competitive. Government spending needs to be slashed, taxes reduced and red tape eliminated.

Propping up the private IKB bank with tax payers money.
Bundeswehr in Afghanistan.
Transrapid

Could cut all of that spending tomorrow as far as I'm concerned!

Germany's economy is doing well on the export level, it's domestic demand that is the issue.
If low paid public employees end up taking home an extra couple of hundred a month, they AREN'T going to be siphoning it off to private accounts in Liechtenstein but putting it straight into the domestic economy.

Leaving aside the "China Effect" as that spills over into the whole global / USD currency thing.
It's not my direct job but I've worked with colleagues over the years who award industrial contracts throughout Europe.
Time and time again Germany wins hands down on reliability, co-operativeness, productivity, location, get-the-job-done-ability and...PRICE.

Well said, OG, and succintly as well. The hidden inflation that accompanied the switchover to the euro really needs to be acknowledged as a significant cause of the reduction in real wages.

MT just wants Robin Hood-style redistribution of wealth.

MT, any complaints about the 5,2% rise in steelworkers' wages (one in excess of inflation)?

MT, you really have no idea how to get the domestic economy going on a long-term sustainable path. Learn how inflation works (and its nasty side effects) then come back for further discussion.

No bank should be bailed out with taxpayer money and state-owned ones shoud be sold off. Transrapid is a waste. As for Afghanistan, MT, get a clue. That is the whole point of an alliance. Was Western Europe prepared to solve Bosnia and Kosovo on its own in the 1990s. No, just as the US cannot handle Afgahnistan peacekeeping on its own either. Not that a hartnäckig far left ideologue like yourself would ever dare to understand.

One more thing, MT, how do you price the rent for the properties you own and rent out?

And we can hang Zumwinkel the Bishop of Nottingham from a gibbet!
String 'em up, it's the only language they understand.

Conq. For about the millionth time I am not disposed to enter into a discussion of my personal circumstances with you
nor reveal personal information about myself to you.

Considering I don't have the slightest idea who you are (other than being one of the thousands of Englishmen in southern Germany) that information would be merely for the purposes of discussion and argumentation. I guess you are afraid of that, not about losing "privacy".

I am not afraid of any discussion, but let's stick to the discussion at hand hey.
Strikes amongst VERDI organised workers in Germany opposing the latest offer and the issue of pay.

I know you love to go personally for your opponets jugular when you start to lose the argument Conq.
You accuse them of not having examples or facts or figures or being DDR fans or or anti-semitic or "Anti-American", but I've heard it all a 100 times dear and it just don't wash.

So glad you wrote that. Libertarians and Free-marketeers can never quite get themselves to address morality or fairness or justice. Whenever you bring those pesky things up, they immediately want you to quantify, which, of course, derails the discussion. Their house-of-cards philosophies fall apart when you force them to factor these things in. They simply can't understand why people don't want to live and work under conditions that they themselves would never tolerate.

For someone who gets shot down repeatedly by TTers other than myself you have a rather delusional view of your own imagined success in discussions on economic issues. Perhaps the fact you cannot cite quantitative facts to support your contentions should induce you to reexamine your thinking, which is naively based on Marxist ideology.

As for being anti-American, the Linkspartei and some members of the SPD and Greens are. It's a fact. The DDR was a far left society. Another fact. You yourself have admitted that anti-Semitism is a problem.


Normative discussions are going to bring out differences in opinion- it is a grave error to mistake your opinions for immutable truths. If you complain about something but cannot quantify its scope, how can solutions be devised to solve the injustice about which you are complaining so passionately? Is it material, is it something than can or should be fixed? What are possible side effects and otehr variables to consider? It seems as though you would rather complain and be "morally one-up" in your own mind than to really explore solutions that might work but don't fit your ideological straitjacket.

As for living and working conditions, you have no way of knowing what I or any other person has had to endure, or not. I am also quite comfortable discussing morality, fairness, and justice. Just don't expect me to agree with you and don't pretend that only you know what is moral, fair, and just.

You have called on me twice to provide facts on this thread.

One an example of low pay, did that with the Kindergärtnerin and a link.
One figures about falling real pay, did that with a link.

I don't imagine I win the argument all the time by any means.
But a couple of cheap shots you got out of the Ladybird book of neo-Liberalism doesn't mean you win the argument either.

I'm not here to have the big argument. I'm not going to hugely change my opinions, nor the neo-liberals / conservatives either.

I just try and put some of the stuff that goes on in Germany into a bit of background for TTers.
Cos I'm integrated.

agreed on the IKB Bank and Transrapid. Also agreed on the Bundeswehr in Afghanistan unless the Bundesregierung finally has the balls to send troops where they are needed instead of mollycoddling them in the north.

The problem with domestic demand is caused by the excessively high take of earnings by the government. Governments are notoriously uneconomical at spending money correctly. By reducing government expenditure considerably on wasteful projects and services and handing this money back in the form of tax cuts can increase demand considerably in an economy. Demanding pay increases in the public sector will not address this problem but make it worse.

btw, what exactly do you understand by the "china effect"?

By "China Effect" i meant the export of manufacturing to Asia, primarly China.
And the links of that into the global economy, US Dolar, USA public debt, China's thirst for Oil, Africa etc etc.
But that would get us off the domestic / Europe issues.

yeah but what exactly is the "effect" of the trade with China, in your opinion?

Mate, love to another time, too much on right now innit.

I will be staying home with my son tomorrow because of the strikes! YEAH Strikes! Now if they could just manage to do it on Fridays and Mondays we'd be in business.

Two problems with the chart that I can think of right off the top of my head. Have consumers altered their purchasing patterns since the early 1990s; i.e., is the basket of goods used to compute inflation being held steady? I would think so, especially to substitute less expensive goods for more expensive ones. If you aren't purchasing an expensive car, and never have, changes in its real price are of no concern to you as a consumer.

Starting a time series in the early 1990s is also problematic, as hindsight shows that this is a time when German competitiveness was sharply eroded by inflation and high wage increases that raised Germany's Real Effective Exchange Rate to undesirable levels. The fall in real wages since the early/mid-1990s is partly an amelioration of the distortions of the early post-reunification years, most of which were caused by ineffective government policies.

There have always been people in society who struggle, for one reason or another. Let's try to do something about it rather than merely pretending it just started to occur the past few years. Globalization and other factors have had some disinflationary effect on wages, but cannot simply be rolled back by politicians.


MT, I have, as usual, debunked your inaccurate and incomplete analysis (actually OG did an even better job of that).

I have already explained to you why the Kindergarten teacher gets paid less than a senior corporate executive. That you refuse to recognize facts is your own deficiency. It is quite a bit easier to become a Kindergarten teacher than it is to rise to the top of the executive ranks, and beyond the factor of experience, a very different skill set is required, thus their pay scales will not overlap or be concurrent. I am not so sure teachers are poorly paid in Germany- the ones I know don't feel that they are. It certainly isn't a fact that Kindergarten teachers should get paid more than corporate executives- that is merely your opinion. Both are needed in society, but the job market values them differently, hence the differences in salary. Nothing sinister there.

Home today with my two girls as the Kinderkrippe is striking. The info they provided parents from ver.di says that the trained Kinderpflegerin / Erzieherin start at BRUTTO ca. 1500 / 1900 Euros per month. And they are being asked to agree to an increase in working hours from 38.5 to 40 hours per week--potentially endangering jobs. If these stats are right, I am very sympathetic to their requests for more $$$. My worry is that this sort of strike doesn't really affect the decision-makers--just parents like me who have to take flex-time/vacation or pay a babysitter...anyone know what the chances are of a long-running strike? It would be really terrible for me. Timing on today's strike is already bad--I have two major projects that have fallen behind schedule and I just got the further data I need for both yesterday. So a strike last week would've been not such a problem, but today is very inconvenient...

Ok, I'll admit right now that I've only skimmed this thread, so go ahead and flame me if I repeat a point.

Is this a public Kinderkrippe? Are all Munich Kinderkrippes striking today? or just public not private?

It seems to me that someone working as a Kinderpflegerin is in most cases not the primary wage earner in the household. Also, it is no secret that particular work doesn't pay well, in part because many people can do it. If you want to make a lot more money than that, it makes sense to target a different career path.

Wow, I am agreeing with what Conq said.

I have friends that are home today with their kids because the KiGa are closed, most are at home moms, but I would be put out of I had kids and had to miss work because of a strike.
That said, I hate Unions and Strikes. I have always worked in the private sector and had to beg myself for my pay raises, or move to other jobs. They get no sympathy from me. I haven't had a pay raise in 4 years, the small one I did get, I really had to make a presentation for it. People should get pay raises on their work ethic and work preformance not because they belong to an Union.

My children are in a public daycare facility. In Munich its like winning the lottery to get a spot in public daycare, much less two spots -- if you don't sign your kid up in the first trimester of your pregnancy, you can pretty much forget it. If Germany wants educated people to have children, they need to ensure that there is some sort of daycare available that parents can feel good about it -- and I personally feel that probably means paying staff a little bit more...

Just met a bunch of Kindergarten staff just on their way back from a strike rally.
What a nice bunch of people.

... met them too. A fine upstanding bunch of people who just want a little more money for looking after double income people's kids. They deserve all the support they can get!

Looks like Verdi members working at airports (including Munich and Frankfurt) will be striking this Wednesday.

More from Sueddeutsche.de (in German) here.

Daycare, kindergardens and after-school care (Hort) in Munich are all striking on Thursday.

Lufthansa cancelled many domestic flights for tomorrow, March 5th: Lufthansa cancellations

Looks like other public sector employees are striking in Munich tomorrow too -- so check before going to any city offices like the KVR -- Suddeutche link.

Anybody heard any speculation about what the chances are for a longer strike happening? could be a nighmare for those of us with small children...

Already is a nightmare trying to support a family in Munich on real wages that were low anyway and have declined over the years.

Just leafing through this thread. I was wondering what measures you were using for economic performance and poverty.
According to the CIA factbook, for example, the UK had a slightly higher gdp last year, but the difference is pretty small, so it would not appear that being less regulated is giving them a strong advantage on the overall economic performance.
Or are there other numbers we should consider?

Germany:
GDP - per capita $34,400 (2007 est.)
Population below poverty line: 11% (2001 est.)

UK:
GDP - per capita $35,300 (2007 est.)
Population below poverty line: 14% (2006 est.)

Numbers for people below the poverty line are not directly comparable as they're for different years, though.

Barbett, I was referring to GDP and unemployment figures when I remarked on the UK's strong performance since 1997, which is better understood as a comparison with previous years' UK economic performance. Solely looking at per capita GDP figures in 2007 would give you an incomplete picture of UK economic performance in the past ten years.

As far as regulation's effect on an economy, GDP figures also present an incomplete picture, particularly when you take into account the fact the UK economy is rather more significantly tied to services and consumer spending than the German economy is. Regulation is bound to affect the two economies in somewhat divergent ways.

The OECD is a far better source than the CIA Factbook for economic data. You might also find this paper to be of interest:
http://www.parliament.uk/commons/lib/resea...98/rp98-064.pdf

Poverty rates, AFAIK, are not evaluated by a uniform standard, and they are, like virtually all economic data, subject to interpretation. Some may argue that GDP is a flawed measure since it measures output rather than income and household wealth.