German success is surprisingly recent

Many people assume that Germany has long been an economic success story. It was certainly successful back in the 1950s and 1960s. But as recently as 2004 it was widely viewed as the “sick man of Europe” despite all those sleek BMWs and Mercedes they churn out each year.


The normally reliable Matt Yglesias falls into the trap of (implicitly) assuming long term German success in a piece on youth unemployment. Yglesias tries to explain the low rate of youth unemployment by pointing to their system of technical training for students that are not college bound. That certainly seems like a fine system, but it’s been around for decades, and thus can hardly explain the amazing post-2004 German jobs miracle. Why do I use the term ‘miracle’? Consider:

  1. Germany was hit roughly as hard by the 2008-09 recession as the US.
  2. Unlike the US, the German working age population is not growing. 连通常比较靠谱的Matthew Yglesias【译注:著名博客作家,擅长写经济和政治话题】也掉进了这个圈套,他在一篇描写年轻人失业问题的文章里(隐含地)预设了德国长期成功这一前提。Yglesias试图将(德国)年轻人的低失业率归功于不以升读大学为目标的学生技术培训系统。这个系统看上去当然很好,但它已经运作了几十年了,因此很难用它来解释2004年以后德国令人惊讶的就业奇迹。为什么我用“奇迹”这词?


  1. 德国在2008-09年的经济衰退中受到的沉重打击和美国大致相当。
  2. 不同于美国,德国就业适龄人口并没有增长。 Put those two together and you’d expect very little German job creation in recent years. And yet German employment has risen by 6% over the past 6 years, whereas American employment has declined, despite a RGDP recovery that is far more brisk than the eurozone, indeed faster than in Germany. That’s pretty amazing.


I sometimes wonder how progressive readers would filter Yglesias’s message. The type that thinks that if a program works in Sweden it would certainly work over here. The ones that Paul Krugman insists are “reality based” in their thinking. German job training seems good, and Obama has recommended some programs for America. The highly inegalitarian German high school system might make American progressives squirm, but Yglesias reassures them that this approach would be hard to implement in a country that lacks the tight cooperation between companies, unions and local governments.

我有时会怀疑进步主义读者是怎样看待Yglesias的看法的。这类人认为如果一套方案在瑞典奏效,那它在别处也会,Paul Krugman坚定地认为这些人是“基于事实”来思考的。德国的职业培训看上去做得不错,奥巴马也已经建议在美国施行一些类似的方案。德国那种高度分化、区别对待的高中教育系统可能会让美国进步主义者不舒服,但Yglesias向他们担保,德国的做法在公司、工会和地方政府缺乏紧密合作的国家很难实施。

Of course none of this has anything to do with explaining how Germany went from being the sick man of Europe to its shining star, all in a period of 10 years. Here’s the German unemployment rate since 1960. Notice that Germany had 8% unemployment as far back as the mid-1980s, during the Reagan boom in America. Things had been getting worse for decades, and the 1980s figures suggest that the problem wasn’t just German reunification.


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So what’s the real explanation for the German success? That’s pretty obvious; the Hartz reforms of 2003 sharply reduced the incentive to not work, and sharply increased the incentive to take low wage jobs. As a result, today Germany has lots of very low wage jobs of the type that would be illegal in France or California. (Germany has no minimum wage.) Here is the Guardian:


Exactly 10 years ago today, Germany’s labour market was subjected to the first of the so-called Hartz IV reforms. Brought about by the smooth centre-left chancellor Gerhard Schröder, it was a watershed moment that changed the way the German government deals with poverty.


The changes were riddled with the kind of Anglicisms that German officialdom likes to deploy for any modernisation. In the past decade, unemployed Germans have been bewildered with a kaleidoscope of new “Denglish” terms, from “Jobcenter” to “Personal Service Agentur” to “Mini-Job” to “BridgeSystem”. But the measures recommended by the Hartz commission – named after its chairman, former Volkswagen executive Peter Hartz – boiled to down to this: the bundling of unemployment benefits and social welfare benefits into one neat package.

这些变化充满了英国范儿——德国官僚总喜欢为现代化搞点花样。在过去十年里,德国的失业者们被五花八门的新德式英语名词搞得晕头转向,从“就业中心”(”Jobcenter”)到“个人服务中介”(”Personal Service Agentur”)到“迷你工作”(”Mini-Job”)到“桥接系统”(”BridgeSystem”)。但这些由哈茨委员会推荐的措施——以该委员会主席、前大众汽车公司执行官Peter Hartz命名——可归结为:把失业津贴和社会福利捆绑到一个简洁的方案中。

The immediate effect was to leave those living on benefits worse off (as of 2013, the standard rate for a single person is €382 a month, plus the cost of “adequate housing” and healthcare). But the new element that brought the most profound change was the contract, drawn up between the “jobseeker” and the “Jobcenter”, which defined what each party promised to do to get the jobseeker back on somebody’s payroll. This was coupled with “sanctions” – in other words, benefit cuts – if the jobseeker failed to keep up his or her side of the bargain. With those two measures, Germany came to accept the modern interpretation of the word “incentive” in the job market: the doctrine that poor people will only work if they are they are not given money.


There are myriad debates about the net results or benefits of the Hartz reforms. Unemployment, both long-term and short-term, has certainly dropped considerably in Germany since 1 January 2003, but critics say that’s only because most jobless people are forced to accept the next job they can find – and often they end up in one so low-paid and part-time that they were still dependent on some sort of state welfare anyway. Then again, the flexibility that allows employers – especially major industrial companies – to take on and lay off part-time shift workers depending on the state of the export market has certainly helped Germany to ride out the global economic crisis in the past three years.


But what is hard to overlook is that the Hartz reforms have had two social effects. First, they have helped to accelerate inequality in Germany. According to an April 2012 OECD report, “Germany is the only [EU] country that has seen an increase in labour earnings inequality from the mid 1990s to the end 2000s driven by increasing inequality in the bottom half of the distribution.” The report goes on to point to “a set of reforms in 2003 meant to increase the flexibility of the labour market” which help to explain the “wage moderation”.


So the one major success story among developed countries has achieved its success by doing essentially the exact opposite of what progressives want. Germany has no minimum wage, reduced its incentives to live off welfare, and has a level of wage inequality that is increasing even faster than in the US. It’s no wonder that progressives prefer to focus on things like “vocational training programs,” which were just as common during the 30-year period of steadily rising German unemployment.


And yet Paul Krugman can say the following without blushing:

然而,Paul Krugman还是可以脸不红心不跳地说这样的话:

Just to be clear: Yes, you can find examples where some liberals got off on a hobbyhorse of one kind or another, or where the liberal conventional wisdom turned out wrong. But you don’t see the kind of lockstep rejection of evidence that we see over and over again on the right. Where is the liberal equivalent of the near-uniform conservative rejection of climate science, or the refusal to admit that Obamacare is in fact reaching a lot of previously uninsured Americans?


Here’s an example for Krugman. Much of the progressive movement seems entranced by a pied piper from France who thinks inequality can be reduced almost costlessly, and that even France needs to be much more socialist. Meanwhile they almost totally ignore a highly successful social market economy. The biggest economy in Europe. What would Al Gore call German labor market policy success? An inconvenient truth?

现在我就给了Krugman一个这样的例子。似乎很多进步主义运动都是受来自法国的彩衣魔笛手 (Pied Piper)【译注:彩衣魔笛手源自于一个德国民间故事,他的笛声带有魔力,可以诱使孩子们跟着他走。】鼓动,认为不均等的改善几乎没有成本,认为连法国都需要变得更加社会主义。与此同时,他们几乎完全无视一个政府积极干预的社会市场经济的高度成功案例。那可是欧洲最大的经济体。Al Gore会怎么看待德国劳动市场政策的成功呢?一个讨厌的真相?



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