Scott Sumner on the German Jobs Miracle

He writes,

So what’s the real explanation for the German success? That’s pretty obvious; the Hartz reforms of 2003 sharply reduced the incentive to not work, and sharply increased the incentive to take low wage jobs. As a result, today Germany has lots of very low wage jobs of the type that would be illegal in France or California. (Germany has no minimum wage.)

3 thoughts on “Scott Sumner on the German Jobs Miracle

  1. Perhaps we might examine the degree of German success in the development of a “managerial society” in which the governmental and non-governmental sectors of the “managerial class” have attained a level of co-ordination (and at times co-operation) that has imbued that class with sufficiently accepted authority to contend with the principal concerns of the greater body of the populace (the “masses”), particularly employment.

  2. It’s rather presumptuous to attempt to discredit a book that you haven’t read yet, based on trying to knock holes in the favorable reviews.
    Have you read Marx? Then you are likely to have discerned that the basic flaw in Anglo-Saxon capitalism is inherited wealth. Look no further than the Kochs and the Waltons for proof.
    Or have a look at France and England in the 18th century. How well did that turn out? Bloody revolution in France, and massive dispossession by enclosure in England. Was it mere coincidence that the Mississippi Bubble and the South Sea Bubble burst simultaneously? No, that was capitalism at work.

  3. See my comment on the Noah Smith/Solar thread.

    A similar remark appears here – modern society basically outlaws subsistence living. And on the whole and over time (at least until now) needs to have everybody participating. (Participation is broader than employment for wages.)

    So any system that has too high a reservation wage, too high a set of barriers to working or hiring, etc. will suffer because it is not gaining maximal participation from every available person. (Again, maximal participation might be raising children or writing poetry – and hence some level of support for those without wages will be useful.)

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