Unions BOOST Economy In Germany

Author: August 7, 2011 11:30 am

Image from http://libcom.org/library/unions-revolutionary-critique-red-black-notes

As the Republican war on unions continues unabated, we should expect to see more jobs go overseas, and an increase in unemployment. At 9.1%, with perhaps a real unemployment rate of close to 20%, it’s probably time to start joining unions by the millions. Why you ask? Well, in Germany, unions are on the rise and the economy is soaring there, despite economic downturn in Europe and the United States.

At of the encouragement of the German government, unions are on the rise, which has resulted in an economic situation that Americans can only dream of at the moment. Because of increasing union membership, Germany has a 6% unemployment rate which is low compared to other European countries and the United States. Americans certainly wish the unemployment rate were 6%.

But that’s not all. Because of unions, income equality has also increased, leading to a higher purchasing power among the working class. Because unions secure better salaries for workers through the power of fair negotiation, the people in Germany are able to afford many of the products that businesses offer there. This means that money flows back into the German economy and back into the hands of corporations. In other words, everyone wins and prospers. Not only that, but corporations pay a higher tax rate in Germany as well, meaning they have to hire more people to boost production.

But why pay German workers a high salary when they could just outsource the work? Well, because of unions and the government support of those unions, German jobs are PROTECTED from the threat of outsourcing. Sure, businesses expand their operations elsewhere beyond German borders, but they don’t move their operations overseas like corporations in America do. In just the last ten years, American corporations have outsourced 2.4 million jobs. Can you imagine having those jobs back?

Income equality is also better in Germany. The top 1% of German households earns 11% of all income, which has remained unchanged since 1970. However, in the US the top 1% makes more than 20% of all income, up from 9% in 1970. Add on top of that, the destruction of unions, and one finds that American workers have less purchasing power. Taxes are also a big reason why Germany has a better overall economy. Corporations and the wealthy are taxed at a higher rate in Germany than in the US. This taxation is a big reason why the German government has low deficits, and the fact that regulation is tighter. Our deficit is high because corporations, aided by their Republican pawns, have loopholes that allow them to pay zero taxes. Get rid of the loopholes and deductions, and couple that with raising the tax rate and tightening regulations and our deficit will start melting away.

In Germany, corporations and unions peacefully coexist. Because of unions, people have jobs and job security. They also have higher wages, health care, and other benefits. Unemployment is reduced because unions have strength. And because unions keep high wages secured, the purchasing power of the German worker is high, resulting in corporations hiring MORE workers in the manufacturing and service sectors to keep up with demand. It’s a win-win situation that we ought to emulate. Busting unions has only led to higher unemployment, income inequality, and a strain on the US economy, which has reached a breaking point. The best thing we can do in this country right now is to increase union membership, strengthen our negotiation power, tighten regulations, and increase taxes on corporations. Only then will we see the overall economy improve.


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5 Comments

  • In regard to the first Post, Germany no longer allows for inmates to rule the assylum. Also those companies are not just traded in Germany but the rest of the World. All the Major Exchanges have adopted the SEC rules and regs. Only Stock Holders can vote for board members. Where you came up with that is up for grabs. You also reference Unions as being needed as some given, that they improve Scocio / economic benifit? Better go back to the history books on that one. Placing power in the hands of the coruptable, will lead to corruption. Unions stifle entrapenuership and force unreasonable mandates on those that don’t wish to labor under thier corupt system. That was corrected by World War II. The biggest advantage to the German economy is the 100% write off on new machinery purchased from German Manufacturers. The point of this article was that “Unions create jobs”. Quit the Politics and stick to the point. Then again, the point is indefensible. Only the Scocialist propaganda machine on this site could come up with the crazy stats and information thrown about. Germany’s economy soaring???? Get a life. Oh yea and the second poster? Go back to sleep, you’re having a bad dream.

  • While union membership and the socio-economic benefits that come with the expansion of unions are sorely needed in the U.S. labor market as a balance for corporate greed the reality is that it is not just unionization in Germany that has been so beneficial to their economy and levels of employment. First off, the German government has encouraged the manufacturing sector to expand with subsidized benefits for companies that retain jobs and operations in Germany and by providing tax incentives and employment subsidies to companies that expand within Germany rather than shipping jobs to cheaper labor markets. Second, publicly traded corporations in Germany are required to set aside up to half of the positions on the board of directors for said companies to appointees nominated and approved of by the companies employees. Finally, the German government provides “partial” unemployment insurance to workers who’s employers received reduced work hours due to business slowdowns so that a company can ride out a short-term period of economic uncertainty without releasing workers into unemployment rolls. These and many other pro-worker programs have been the true benefit of the German working class.

  • While I love your sentiment, Unionization, by itself, will not create jobs.

    Demand is the only thing that will do that.

    THE VERY LAST THING we should be doing right now is attacking the deficit. We need to be BUILDING, BUILDING, BUILDING. And the Government is who should be hiring.

    In order to get everybody back to work, it requires we increase the deficit. At least, in the short term.
    With high employment, intelligent tax policy, closure of special interest loopholes, we can move toward a surplus.

    Our system is NOT working to protect the American Worker.

    At THIS point in time, the Republican Party has ‘sold it’s soul’ to the devil. They did it so they could ‘recruit’ a ‘protest movement’ and corrupt it for their own benefit. (majority control of congress).
    What they didn’t count on is grabbing a tiger by the tail,.. they don’t dare let loose.
    So who’s in control???

    http://www.addictinginfo.org/2011/08/04/the-enemies-within-the-20-most-dangerous-conservatives-and-their-organizations/#comment-11556

    • I think the prevailing wisdom is that unions create job security and higher wages; both things that stimulate spending,which in turn increases demand.

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