New Post (101) : WAGE RESTRAINT IN SLOVENIA AND GERMANY.
Germany and Slovenia have, chosen to liberalize their rigid labour markets,
-albeit at the margins.
Sure, population ageing is certain to put a strain on their generous social welfare systems
So, putting more people to work is the best way to guarantee their sustainability.
As countries with strong trade unions, the German and Slovenian governments have always relied heavily on social dialogue to promote economic goals.
It is, therefore, unsurprising that the two countries' impressive export performance is based on the same policy – “wage restraint”.
i.e. wage growth lagging behind productivity growth, that lowers production costs and makes exports more competitive.
Makes mighty good sense to me.
You get the much desired growth, more people employed, and a reined in inflation that benefits all !
In an old fashioned way, you'd recognize this approach as being---"some sacrifice by all for the larger good of all".
Prudence or Wisdom ---!!! ...I reckon---BOTH.
I tip my (grandpa's, frayed at the edges...) hat to Germany and Slovenia.
Salute !
Charlie Brown
