Wednesday, February 9, 2011

No miracle in 'German miracle': cheating and exploitation

According to J.M. Álvarez, who cites Der Spiegel as source, the secret of the "new German miracle" is no other than extremely low salaries, supplemented by state subsidies. Some 10% German workers earn less than €1000 monthly, while this figure goes up to as much as 20% in East Germany.

€1000 is considered low income even in Spain. For the reference, a low apartment rent almost never is under €700 over here, to which one has to add food, clothing, transport, electricity (maybe €100 per month in winter), taxes, furniture, etc. €1000 is a true survival salary over here, so I guess that in Germany that is well under the poverty line. 

Naturally subsidies to under-earning workers amount to indirect subsidies to private capitalists, what in turn makes Germany companies unfairly competitive in the EU unified market, pushing competitors to impossible economic situations. 

The ECB-IMF recipe of budget cuts is in fact counter-producing, specially if the cuts affect social services, making local workers non-competitive. Can you work for less than €1000 in Spain? Really not, you can't - at least not in most towns. Can you in Germany? Yes because the state pays the difference. This makes the Spanish working force and, indirectly, companies to be unable to compete. 

The only possible solution (within the system) is to expand social expenditure (cut in Afghanistan troops or the King's salary if you wish) and to force the inflated housing market to collapse. If housing prices (and others like electricity) collapse to realistic market levels, then people could work for salaries that are competitive with those of Germany. 

Otherwise there are only two ways ahead: economic and social collapse or socialism. And probably both are the same one (one will bring the other possibly).

1 comment:

  1. Interesting Maju,

    Unfortunately, in Spain there are many people who win less than 1000 €, is a big problem, as you said, because rents, mortgages, cost of living is higher. The thing is complicated if a family only a person works, and there are children involved. Is to go crazy.

    It is not logical that there monarchies in the XXI century.

    Countries with monarchies are not citizens, are subjects, and the budgets they can not be invested in something productive.

    They can not freely choose the head of state.


Please, be reasonably respectful when making comments. I do not tolerate in particular sexism, racism nor homophobia. The author reserves the right to delete any abusive comment.

Comment moderation before publishing is... ON