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Germany's Shrinking Middle Class

Germany's economic recovery "resembles that in Dubya's USA: growth for the well-off, more (crap) jobs but less income for the rest," writes DoDo in the European Tribune and points to a just released study by the German Institute for Economic Research (DIW) that says that real income fell by 3.5%.

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Zyme on :

Interesting article with plenty of revealing graphics. Just the kind of info I need to improve my motivation for additional qualifications.

Joe Noory on :

It's best to remember that we've been through this "real income fell" argumentative bufoonery since the late 80's. Were it actually the case the compounded effect of that subjective projection would be that our purchasing power would be a half of what it was two decades ago, and there is no way that that could be the case. Were it so, the data on the uptake of manufactured goods, foods, raw materials, etc., would reflect it. The fact that some new wealth at the top of the scale changes the relative meaning of "median", but not the material effect is at the heart of all of these tortured theses.

Don S on :

Oh, I believe there is something to it, Joe. I am seeing the effects both in my owmn life and the lives of others. I met a German staying at my guest house last summer. The fellow had been a middle manager type in a medium-size German company. He had come to the UK because he could not find employment in Germany. Either he was 'overqualified' or somehow imperfect, which can be the death knell in a German labor market which seems to be growing very slowly if at all. So he was in Ipswich looking for a job. I think he ended up with something little better than a McJob. Admittedly this fellow did not strike me as the brighest candle in the priue die. I think he was fairly well-educated but his technical skills weren't up to snuff at least by UK standards. But still he ought to be employable at something approaching his former status. Apparently not..... And he's not the only one I've seen.

James Bass on :

Joerg, it's a mistake to compare the economies of "Dubya's" America and Germany. We have a much more open economy with greater upside reward for risk takers. Which is one reason many Europeans come here to make their mark. And our middle class has been doing quite well, thank you. The dynamism in our economy makes it possible for the creation of vast amounts of wealth. An extreme example are the founders of Google. Ten years ago they had nothing; now they are billionaires. That pattern repeats in many ways in our economy, creating greater riches at the top and thus increasing "the gap between rich and poor." Liberals get hysterical about this. For them, great success suggests exploitation and unfair advantage. One of the best writers on this subject is Paul Graham, a software entrepreneur, artist, essayist and venture capitalist. Follow the link below. Cheers! Jim http://paulgraham.com/gap.html

Joerg - Atlantic Review on :

I agree with your second and third sentence and one example is described in this Atlantic Review posts: [url=http://atlanticreview.org/archives/456-Brain-Drain-German-YouTube-Founder-Enjoys-the-American-Dream.html]Brain Drain: German YouTube Founder Enjoys the American Dream[/url] Regarding the status of the Middle Class in the US: I beg to disagree with you. I mean why are job outsourcing, NAFTA, health insurance etc such big topic in the US right now. I found [url=http://atlanticreview.org/archives/105-The-American-Dream,-blue-collar-hearts-and-minds-and-Christian-values.html]the Mother Jones article here[/url] interesting And before you criticize the source, [url=http://atlanticreview.org/archives/340-The-American-Dream-and-the-Future-of-Employment.html]here is something from the Economist[/url], hardly a leftist paper And then there are some statistics that show that social mobility is declining in the US as well, not just in Europe.

Kevin Sampson on :

BMW to increase US car production "The move is set to create 500 new jobs and comes after the firm recently said it would cut 7.5% of its German workforce in 2008." http://news.bbc.co.uk/2/hi/business/7287640.stm

joe on :

I some how missed this as a news source. Sounds more like a rant from some euro elite. Then again this does fit the template of this blog.

Joerg - Atlantic Review on :

Nope, the Euro elite is happy. Their income (mostly from investments rather than from real work) is increasing. They are currently skiing in the Alps or surfing in Hawaii or buying summer houses in the Hamptons since the US is such a bargain. They certainly don't spend their time on cold winter evenings writing for European Tribune.

Joe Noory on :

European Tribune impresses me as the sort of blog that would be rather enamoured with Mother Jones... a publication, by the way, that used to plausit joyfully ahout a socity without tradable money or a way to save. I'm pretty sure they used to have "central bong" installed. Nonetheless, the same sort of person that would suddenly go from demaning logic to seeing the apocalypse in a tortilla if it seemed politically expedient are back with the thousandth repetition of this absurd notion that if mapped out - would indicate that the economy has been in continuous contraction since the stagflationary 70s, when they seem to stop becuase they're getting sentimental about their first girlfriend. To illustrate just how stupid their idea are, even if real (not relative) wage growth was what they say it is - 0%, inflation would erase 99% of your income in 2 decades. The last I checked there were FEWER people having to make the choices that come with meagerness, not more. Twenty years ago, hbeing middle income meant possibly treating your kids to ice cream on sunday. Now the much smaller number of people who are sub-middle income would have to make such a choice. Objectively, the rising of the tide raised all of the boats, so the only way you can make the guilt-tripping argument is to try to get people to forget about actual material need, and focus on the envy of relative wealth. Purpose? A subjective emotional bludgeon. ANyone using it has as the very last thing on their mind the well being of anyone in need.

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