With China’s President Hu Jintao dominating the headlines this week with his visit to the USA—taking part in the first formal state dinner in Washington given in honor of the Chinese diplomatic party, President Obama has once again voiced the importance of increasing the amount of goods the US exports in order to improve the ever debilitating US economy. In 2000 the US imported 100 billion dollars worth of goods from China and exported 16.3 billion dollars worth. By 2009 the US imported 296.4 billion dollars worth of goods from China, and exported 69.6 billion dollars worth. No anecdotal statements are necessary to underscore the trend demonstrated by these statistics that has been long ongoing and will only continue, undermining US economic viability on a global scale (except perhaps to suggestively link the US unemployment rate of 9.4 % to these numbers).
Just this weekend NPR’s marketplace ran a feature on Germany’s economy and their adjustments in light of unemployment and globalization which could prove helpful to US economists and business owners undergoing severe crises of fiscal identities. There are many reasons to look to Germany in order to compare and contrast the current US condition. As a US born child growing up in Germany I recall all of the headlines and adult conversations that arose out of the general anxiety initiated by the high unemployment rate attributed to the reunification of Germany and the industrial discrepancies between what had been West and East Germany. With time, however, and political engagement, a relative stasis was achieved. Then once more with the recession in 2007, the unemployment rate in Germany shot up to 13 percent, but in the time since has been stabilized and reduced to 7.6 % falling below the three million mark as the lowest in eighteen years—a remarkable effort in such a short period. It appears that two factors are primarily responsible for this turnaround:
—Increased exports. Slowly, but consistently German exports have been concertedly strengthened and particularly focused on trade with China.
—Kurzarbeit (“reduced hours”—literally: “short work”). The program the government has devised in order to counter the economic challenges of employers in the recession. When an employer is faced with the need to downsize, being unable to pay for the wages and benefits, the government has decided to pick up the wage and benefits bills under the condition that the worker not be fully cut from their position, only works fewer hours. This method serves more as a preparatory training period which will allow employers to retained train workers so that German employers will be able to immediately immerse themselves into their respective industrial branches once the economy recovers, without having to find and retrain able minded workers.
