Lauding the German labour market

Yesterday’s Financial Times included two features praising the German labour market. Maurice Glasman, a Labour peer, and Duncan Weldon, an economist, lauded the German system in which workers have accepted reductions in their working hours. Ralph Atkins and Matt Steinglass described how unemployment rates in Germany and the Netherlands have remained relatively low thanks to the “flexibility” of the labour markets.

What both articles downplay is the severe squeeze in living standards German workers have suffered over the past 20 years. Atkins and Steinglass do refer in passing to reduced benefits for German workers and the complicity of unions in wage moderation.

A model based on austerity for the mass of the population is not one that should be celebrated.