Economy primed for next decade but poor lose out
Germany is in a better situation to cope with the next decade than any other major industrial nation, but the gap between rich and poor is increasing, according to studies published this week.
The greatest strength of the German economy is its broad industrial base, and the close cooperation between large firms and highly-specialised mid-sized companies, said the study which was compiled by the Swiss Prognos Institute and the consultancy Management Engineers.
“Here, Germany is very well positioned with its industrial structure and qualifications,” said the report.
Electro-technology and machine engineering are likely to generate the largest growth impulse for Germany, the report suggested, particularly as these sectors are likely to benefit from the rise of renewable energy and the trend towards energy conservation.
But it is the health care sector which is likely to provide the greatest growth in job creation, with the experts compiling the report estimating that around 500,000 new jobs will be needed in the sector by the end of the decade.
Yet current strong growth rates are not likely to be sustained, the report said. “Our country will on average only grow by 1.1 percent a year until 2020,” the report said.
The healthy underlying condition of the German economy will labour under the burdens of demographic development – an ageing population – and the lack of professionals this will mean.
While the situation may look rosy from a macro-economic point of view, for those at the bottom of the economic heap, things are getting worse, according to new data from the German Institute for Economic Research (DIW). This shows that the gap between high- and low-earners is growing, as those with lowest wages see their income declining.
DIW researcher Markus Grabka said politicians had gone too far in pushing unemployed people into mini-jobs (earning less than €400 a month) or insecure work in the desire to get them off benefits – and the jobless statistics.
“If, of 40 million potential workers, seven million are in mini-jobs, something has gone wrong,” he told the Frankfurter Rundschau newspaper on Tuesday.
He analysed new data for the paper looking at net income between 2000 and 2010. Those in the highest income groups experienced a rise of around one percent, although this did not include income from capital which would add more. Those in the lowest income groups saw their net income drop by between 16 and 22 percent, the paper said.