The German Labour Miracle

Sadly we've yet another piece in the UK press looking at the German labour market and assuming that we should copy some or other part of it. The sadly part comes from the way that no one ever recommends the thing that actually contributed to that miracle: mainly because the English unions and workers simply would not acept what the Germans enthusiastically embraced.

In the battle between rival systems, "Rhineland capitalism" appears to be winning hands down. In the two years since the global economic downturn in 2009, Germany has expanded employment by 1.8m, while the UK, US, France, Italy and Spain have shed 7m jobs. In 2007, when most other countries were nearing the end of a boom driven by excess credit, Germany had the highest unemployment rate (8.7% of the workforce on a harmonised basis) of the group of seven leading industrialised countries. Yet in late 2011, according to OECD figures, German unemployment, at 5.2%, was the lowest in the G7 apart from Japan.

Oh, yes, lovely. The rest of the argument is that because Germany has apprenticeships and work sharing then these two things will bring down the unemployment rate elsewhere.