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Labor and the Germany Economy’s Rebound

February 10, 2011

Last week, The Economist published a briefing on the German economic model and why it is thriving while most of the developed world is struggling to grow after the Great Recession.  For instance, Germany’s economy grew at the fastest rate since the reunification in 1990 and unemployment is at its lowest level since 1992.  According to this article, the key to Germany’s success is the surge of German exports (especially to China) and Germany’s sold foundation of medium-sized exporting firms known as the Mittelstand.  This reliance on manufacturing as the engine of economic growth is striking, as many other developed countries (including the U.S.) have seen their manufacturing base decline.

While plenty of reasons for this strategy’s success, The Economist noted that part of Germany’s success is the flexibility of labor relations in the country.   Under the German model, labor unions work with company associations to set pay and often sit on boards together.  The result is a unique system that has helped produced this flexibility in the German workplace.  In order to understand this system better and see what lessons the German model has for the U.S., the IU European Union Center is proud to sponsor the European Approaches to Labor Relations: Are There Lessons for the US?, which will be in Indianapolis on March 29th.  The three speakers will be Tom Geoghegan, author of Were You Born on the Wrong Continent? How the European Model Can Help You Get a Life; the Director of Region 3 of the UAW Maurice Davison; and Nicholas Strout, VP Global Sales & Marketing at Novalung in Germany.  This event is free and open to the public and we look forward to seeing you there.

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