Wednesday, 13 February 2013

30 hour week, 1923 and 1933

A group of left leaning economists, politicians and trade unionists in Germany have called for a reduction of weekly working hours to a 30 hours week while maintaining current salaries. The reaction among employer associations was predictably muted, but more interesting is perhaps the negative reaction of most German economists. There seems to be very little awareness in the profession in Germany that the German growth model based on low costs and substantial export surpluses creates problems not only for the Euro, but also for Germany's growth prospects. While China seems to be taking steps to boost domestic consumer demand and Japan will do so, at least if it follows the advice given in the FT by Martin Wolf, (see my earlier post) German politicians and economists seem to be oblivious to the problem. Instead, Bundesbank chief Weidmann and others worry about inflation. 1923 clearly is more on their mind than 1933.

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