The German Economic Machine, and Its Implications for America
Frugality, a lack of debt, and a government focused on high production, low inflation and extensive social services are the secrets to providing many Germans with a standard of living higher than Americans making twice as much.
Don Lee profiles a Germany whose economic strengths are based on principles that America once enjoyed, and seems largely to have lost.
"Germany's economy looks like that of the U.S. a generation ago. In 1975, manufacturing accounted for about 20% of the United States' economic output, or gross domestic product, about the same as in Germany today. Since then, U.S. manufacturing's share of GDP has slid to about 12%.
In 1975, the U.S. budget deficit was a manageable 1% of the economy, about the same as Germany's now. Last year, the U.S. deficit was about 10%.
American families in the 1970s and early '80s typically saved about 10% of their take-home pay, about the same as in Germany today. The U.S. savings rate these days is in the low single digits."
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German and American Work Time
There is also a striking difference between German and American work time:
The average German worker works 82% as many hours per year as the average American worker.
All full-time workers in Germany are guaranteed at least 4 weeks paid vacation. Over one-quarter of American full-time workers have no paid vacation, and those who do average just a bit over one week per year.
Full-time German employees have the right to shift to part-time work with the same hourly earnings. Part-time workers are protected from discrimination.
Charles Siegel