Why the German economy is surging
Even though a debt crisis is gripping the European continent – the German economy is surging. According to the latest economic data – German unemployment fell in the month of December – bringing the average number of unemployed people in that nation to a two-decade low. Economists are now openly wondering just how long the German economy can be immune from the chaos surrounding it in places like Greece where unemployment is at 18% and Spain where unemployment just topped 23%. But the better question is why their economy is doing so well. The answer is they do what we used to do. They protect domestic manufacturing with high barriers to imports, and they encourage labor unions. In fact, nearly the entire German auto industry is unionized, allowing the nation to produce twice as many cars as the United States – while at the same time paying their workers more than $60 on average and still make healthy profits. On top of that – the German government has recession-proof programs like the “short-week” that pays businesses to cut back on the hours of workers rather than lay them off during economic downturns. Plus, Germany's constitution gives the labor force a say in everything from pay to working conditions in the factories they work for. All in all – Germany has given more power and protection to workers in their economy – and as a result their economy is growing. We should be taking some notes over here.