Germany is widely considered to be the dominant economic power in Europe. It is Angela Merkel, the German Chancellor, who determines which measures should be adopted in response to the sovereign debt crisis of the Eurozone. On the back of a booming German export industry, German workers are often deemed to be part of the winners in the current financial and economic crisis. As the recent report Explodierender Reichtum, wachsende Armut (Exploding Wealth, Increasing Poverty) by the German Confederation of Trade Unions (Deutscher Gewerkschaftsbund, DGB), however, makes clear, such a conclusion overlooks these workers’ concrete position within the German economy, their falling share in wealth as well as the general increase in inequality in German society.
The renewed success of German exports in recent years has been based on further liberalisation and deregulation of the labour market and cuts in social security contributions. As a result ‘between 2000 and 2008 unit labour costs declined by 1.4% a year in Germany while rising by nearly 1% a year in France and Britain’ (The Economist; 31 March 2010). This decline has been at the expense of workers, as the DGB report makes clear. The number of employees in the low wage sector has increased by 42 per cent since 1995. Almost eight million people work for an average hourly wage of only 6.68 Euro in the West and 6.52 Euro in the East of the country. German wealth overall increased by 56 per cent between 1991 and 2010. Nevertheless, while wages increased only by 47 per cent, private wealth increased by a phenomenal 202 per cent. The picture is clear, the German export industry is built on a dramatic redistribution of wealth from below to above, from workers to employers, from labour to capital. German workers are not participating in the fruits of the export boom. They are not the beneficiaries of Germany’s current dominant role in the European economy.
This conclusion is important for thinking about alternatives to the currently dominant neo-liberal model of capitalism and the reflections about resistance to austerity and restructuring. Rather than falling into the trap of regarding resistance as a struggle against a German hegemon, potentially pitting workers in Greece, in Portugal, i.e. the periphery of the European political economy, against workers in Germany, i.e. the core, the struggle has to be directed against capital as a whole. Capital is the only winner of the enforced austerity across Europe and worker solidarity, therefore, the only way forward to oppose and defeat it.
Prof. Andreas Bieler
Professor of Political Economy
University of Nottingham/UK
Personal website: http://www.andreasbieler.net
22 March 2012