Angela MerkelFor the complete report in Money Week click on this link
Is Germany making a comeback
If Japan can do it, why not Germany? That’s been one of the most hotly-debated questions in global macro circles in recent years. After three days and six cities in Germany last week — my most extensive visit yet — I left with the distinct impression that the biggest engine of Europe is finally shifting gears. Not only would that be good news for a long-hobbled European economy, but it could also be a very important development for a still unbalanced global economy.
Germany still has one of the world’s highest-cost labor forces, with hourly compensation in manufacturing of $32.53 in 2004 — nearly double the $18 average for the industrial world, according to the US Bureau of Labor Statistics. The good news is that Corporate Germany has responded to this cost disadvantage by moving to an increasingly flexible work force. Germany’s so-called “flexi-workers” — part-time and contract temps — now make up over 40% of the country’s total labor force; that’s up over 10 percentage points from the flexi share of a decade earlier.
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