Sunday, February 28, 2010

For 99% of Americans, Germany Is Better

In America, workers are an overpriced commodity destroying shareholder value. In Germany, workers are an integral part of thriving business.

In the American version of predatory capitalism, economists and financial types say that the European model is stagnant because it prizes cohesion over innovation. Even though Germany was also impacted by the ongoing economic crisis, its unemployment rate of 7.5% is actually down from two years ago. The U.S.'s unemployment rate has doubled since then and there's no end in sight.

Despite the made-in-America financial disaster, we still believe that our version of unfettered free market capitalism is the best. That it raises all boats. This flies in the face of the rubble strewn about us, the ruined landscapes of shuttered homes and picked through garbage. The American worker is the victim of this belief, dying before his time, helpless in the face of the hopeless.

German culture emphasizes long-term thinking and sustainability:

Keep experienced people, keep their knowledge in-house. Develop a high sense of loyalty and trust so they feel like they’re part of a family, not just doing a job.

During this crisis, German businesses tolerated lower productivity, anathema to American business. American companies fired all the people they could and made the rest do more.

We hide behind our economic indicators without acknowledging their political agenda. Our official unemployment rate doesn’t count the long-term unemployed or the underemployed; counting the number of those receiving unemployment insurance doesn’t count the people getting extended unemployment, the main federal jobs program. And as of Friday, February 26, there is no more unemployment insurance.

As Mark Twain once said, “There are 3 kinds of lies: lies, damned lies, and statistics.

Here are some (perhaps) irrefutable facts: 25% of the 8.4 million jobs lost in America during the Great Recession (since August 2007) are permanently gone. They will not be coming back.

The country needs to create 100,000 jobs a month simply for the new entrants in the marketplace. For an uptick in the current 9.7% unemployment rate, we will need more than 200,000 new jobs a month.

Economic analysts note things dryly without any context, “Companies automate and shift jobs overseas or move whole assembly lines to China to cut costs.” But Germany didn’t do that. They tried to save the businesses and jobs at the same time because they believe that workers are not interchangeable commodities like soybeans or lumps of coal. They believe that good workers contribute a lot to the bottom line. “Much of the attention on saving jobs has focused on the government’s short-work program, in which taxpayers and companies share the cost of furloughing workers. But Mr. Kramer said the government-financed program of shorter workers was responsible for saving only about 20% of jobs.” In other words, in Germany 80% of jobs were saved through workers helping grow businesses out of the crisis.

The American corporate viewpoint is radically different:

“Companies, in the name of making money, substitute against labor through outsourcing or technology,” said Allen Sinai of Decision Economics. Wages and benefits make workers “so expensive that who wants to hire them? As a result, the displaced workers won’t be rehired unless we have double the growth rate we’re expecting.”

That’s not only cold, it isn’t true.

Germany has an entirely different mind set than America. The emphasis is not merely on earnings and creating shareholder value; it is also on preventing joblessness and the despair that comes with it. People truly are at their breaking point.

Can an unemployed person pay taxes?

So What’s The Diff?

For one thing, Germany did not discard its manufacturing sector. During the economic downturn Germany emphasized both returning the profitability and saving jobs. Siemens, the big manufacturer, retooled through capital investment, betting on powerful turbines, each one of which could light up a city of 3 million.

Behind the curtain of corporate propaganda underlying everything, what’s going on in America?

• Because of an estimated loss of 40% since 2007 in household equity and retirement savings, people cannot retire. Therefore the natural cycle of retirement, making way for the younger generation, is unnaturally stunted.

• 25% of homeowners are substantially underwater and cannot sell their homes. The vaunted mobility of Americans to go where the jobs are is constricted.

• People are living on extended unemployment benefits, if anything.

• 1 out of 8 Americans are on food stamps.

Many have run out of unemployment and cash, subsisting on food stamps alone.

• One person in that position is Jean Eisen from Southern California. She lost her job selling beauty supplies to salons over two years ago and hasn't been able to find a new job. She hasn't had a paycheck or unemployment insurance for several months, and is surviving on foodstamps.

She has become effusively religious — an unexpected turn for this onetime standup comic with X-rated material — finding in Christianity her only form of health insurance.

"I pray for healing,” says Ms. Eisen, 57. “When you’ve got nothing, you’ve got to go with what you know.”

1 comment:

maverick said...

you are so ahead of your time. Thanks cassandra