The Germans do it their way
The New York Times had a great article on how the German economy has defied criciticism to record in the last two quarters economic growth of 2.2 percent, Germany’s best performance since reunification 20 years ago. In the aftermath of the financial crisis Germany was criticised for pursuing its own policy to combat the recession rather than the homogeneous financial stimulus of the US and other major economies. Their policy involved keeping workers in employment rather than having to deal with the economic and social issues of when they were out of work. Furthermore, by keeping wage inflation under control German industry could remain competitive with cars, engineering components etc being sold to the world economy. Part of this policy was the “short work” program to encourage companies to temporarily layoff workers or give them fewer hours instead of firing them. Workers would then be compensated for these lower wages by increments when the company books improved during good times. Click here to see the full article from the New York Times.