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German productivity up thanks to lower wages

Published: 01 May 2012 11:30 GMT+02:00
Updated: 01 May 2012 23:46 GMT+02:00

The information should make the increasingly difficult labour discussions between trade union IG Metall and employers, even tougher.

Warning strikes have already taken place by workers demanding better wages and conditions. The union wants a 6.5 percent wage hike and the unconditional hiring of trainees following their internship period.

Massive demonstrations are expected Tuesday, Labour Day, all over the country, with violence expected, as usual, in some Berlin neighbourhoods. Police have called in for reinforcements, as is the custom, for the day.

The data office said average productivity per hour worked rose 3.4 percent in the European Union between 2005 and 2010.

But Germany posted a 4.0 percent increase for the time period, while in France it was 3.0 percent and Italy showed virtually no gains.

Overall, unit labour costs rose 6.2 percent in the EU, but were only 3.6 percent higher in Germany, due to the moderate wage increases in the last years.

Except for the crisis years of 2008 and 2009, unit labour costs actually declined in Germany between 2005 and 2010, the data office said.

DAPD/The Local/mw

The Local (news@thelocal.de)

Your comments about this article

13:16 May 1, 2012 by smart2012
Big issue is that now companies in Germany (more than in other EU countries) hire temporary workers and salaries are ridicoulus.. (and they are not counted in unemployement numbers even if they just work 15-20 hours for a short period of time). Example: they guys from a big company which came to mount my furniture in Munich earned 60 Euros for 10 hours work and (being self employed as outsourced) they need to pay food for the day/diesel for the van plus of course taxes. And then they say Germany is booming........
14:17 May 1, 2012 by Englishted
@smart2012

Completely correct, the other problem is the unemployment office in league with these agencies and if some journalist would take the time to investigate this link I'm am sure there would be some dark practices to uncover.

However the German press seem to pull the party line of whoever is in power ,free press it may be but toothless it is.

So as in ever major European country the gap between rich and poor grows year on year how long this trend can continue before people wake up I don't know.
14:58 May 1, 2012 by ChrisRea
So the wages in Germany were increased at about the same rate as the productivity (3.6% versus 4%)? That sounds pretty acceptable for me, considering that technology is also responsible for higher productivity.

What is really worrying is that in the rest of the EU the costs with the labour per unit increase faster then productivity. People should earn more, but there should be a sustainable basis behind it (education/qualification which generate increased efficiency/productivity).
17:13 May 1, 2012 by smart2012
Englisted, fully agree. And the risk in Germany is that this may become an interracial issue (eg Turkish against Germans), which would fuel a disaster
04:10 May 2, 2012 by volvoman9
Curious title. One would naturally surmise that lower wages provide the incentive for increased productivity. Ha! The corporate world is at war with labour in order to increase their bottom line. Their excuse is that lower labor costs increases the competitive edge yet the consumer fails to see prices decrease. Guess where the savings end up? Bingo! We are being duped by a cadre of geed mongers who own the political machine. Nothing ever really changes does it. Eat the rich!!!!!
08:48 May 2, 2012 by catjones
volvoman9...it's called Capitalism. They've written books about the subject.
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