Blog 7: High Income Inequality in Manufacturing Between Germany and The United States

In Germany, the manufacturing sector has done particularly well in economics. Some are saying that the American manufacturing sector could take some advice from Germany; while their strategies may be able to take steps towards solve the largest income inequality since the Great Depression. In Germany, manufacturing makes up almost 25% of their Gross Domestic Product, while the U.S. is at roughly 12% (which is less than half its percentage in the 1950s.) In America, trade policies undermine the working class due to outsourcing, tax policies have moved the wealth from the majority to the minority, and labor policies have failed to increase the minimum wage (which is now worth less than it was in 1968 if adjusted for inflation.) At least half of Americans are low-income or experiencing poverty with an income of less than $22,500 for a family of four and another 100 million Americans live in the low-income bracket with an income of less than $45,000 for a family of four. Germany evidently managed to keep their skilled workers during their economic slump in 2009 due to reducing hours and sponsoring short-time work instead of laying people off. Rather than competing with global markets and cheap products, the Germans specialized in high-quality products and kept their share in the growing global market, while other countries like the U.S. and Japan lost shares to China. An example of this would be a recent Mercedes ad stating "We are inventing the car. Since 1886." These communicates the fact that German manufacturers have a strategy of making existing products better and better over time. Germany's strategy works because of skilled and motivated employees, and managers and advocate constant improvement of their products. The article states that German's manufacturing employees have strong representation and is successful due to involving the knowledge of workers and representatives.
This article states a lot of information about the manufacturing sector of Germany and how they've managed to keep a strong market, even in the time of globalization and outsourcing. This article has many strong points, especially pointing out some of the best ideas that Germany has for their manufacturing sector, but there should be more to it. The author, Michael Shank, believes that politicians in Washington should take a look at the German manufacturing sector due to our increasing global competition. He mentions the income inequalities of our people in America, but he doesn't really mention the wages and inequalities in Germany. This article was helpful, but could have included much more information on Germany's economic status, especially within manufacturing jobs for families to show a comparison of them and the United States. Shank mentions both US and Germany's percentage for the GDP that the manufacturing sector contributes, which is fair, but he doesn't show what their minimum wage is in comparison to theirs, as well as many other statistics. Otherwise, I do personally think that the US and politicians that represent the US should take a look at the way successful countries are running their sectors. Germany seems to be doing well within manufacturing, but its hard to tell with the lack of information in the article.


Source: http://www.huffingtonpost.com/michael-shank/what-americas-manufacturi_b_1299260.html