Thursday, July 6, 2017

Bill Mitchell — More Germans are at risk of severe poverty than ever before

Just how poorly the Eurozone is performing is usually illustrated with reference to Greece, then Spain, then Italy and Portugal. The weakest links among the Member States. Not to mention Cyprus, Finland and then some. But the other way of looking at the same question is to focus on the strongest link in the currency union – Germany. A new report from DIW Berlin (German Institute for Economic Research) (released July 5, 2017) – Einkommensschichten und Erwerbsformen seit 1995 (Income levels and forms of employment since 1995), which is only available in German, tells a pretty sombre, if not bleak story as to what has been happening in the Eurozone’s powerhouse over the last 18 years. It demonstrates that not only is the German model wrong for the rest of the Member States, but it is also not generating sound outcomes for its own citizens – well the lower- and middle-classes to be more exact....
Bill Mitchell – billy blog
More Germans are at risk of severe poverty than ever before
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


Kaivey said...

I'm amazed by that. Where I used to work the Gearboxes were Voith or ZF, and they made the technology for the retarders. Sennheiser and Beyerdynamic make some of the best headphones in the world, and Vaillant boilers are top class too. German technology is awesome.

From Billy Blog:

'And meanwhile German capitalists are increasingly finding ways to penetrate Eastern European labour markets to hasten the attack on working (and living) standards in within Germany.

The big bully has built a house of cards for its own people. Crazy really.'

Thatcher said we have to price ourselves into work, except with market forces the price kept falling and with wages going down so did demand. Then the banks came up with cheap money, but that couldn't last. Capitalism has a fault line, but the super rich, who are a minority, do well.

Now many of the small and medium sized company holders and their families vote for conservative parties who continue the neoliberal rot and so they lose customers because people aren't earning the wages. The right wing narrative is that if your wages are too low then go to university and get qualified, or start your own business, or work harder. Except a lot of people can't handle too much college and many others don't want to risk losing all their money by starting their own business as most do fail. The wise saying is, you risk what you can afford to lose. So the right wing will say, 'then it's your own fault, stay poor'. But if most people are poor you end up with a third world country and there is no middle class.

Now if everyone went to college and got degrees then only the people with first class degrees would get the best jobs, but other people with degrees would still end up cleaning the toilets.

I know many people vote conservative for other reasons than their financial situation because of their inbuilt inclination, and that's fair enough, but if our media was more balanced I reckon things would be a lot different. If only Bill Mitchell had a weekly column in The Sun? He would have to cut down the amount he writes, though.

djrichard said...

Sounds like Germany is outsourcing their supply chains to the global supply chain too.

Kaivey said...

AS PCR says, you outsource jobs and you outsource wages then you lose your home market.