The continuing earthquake in Germany?

There is an old and not quite historically accurate joke:

Question: Why don’t they have a revolution in Germany?

Answer: Someone would have to step on the grass.

Well, the Germans are continuing to reform their welfare state, albeit in baby steps. The latest step is to cut jobless benefits. Under the old regime, a German who hadn’t worked for a year would receive 53 percent of his or her old salary, forever. Oh, plus supplements as well. Under the new law they will get $426 per month plus supplements, basically the same as the minimum relief offered to the poor. And the forever word will no longer hold. Recipients can lose some of their benefits if they turn down possible jobs. And they also can take low-paying jobs without losing the benefits. This is a better policy all around.

Here is another recent MR post on German reforms. And did you know that they are cutting taxes by 6.5 billion Euros next year? That paltry sum is hardly Arthur Laffer’s dream, but any movements out of Germany’s previous policy gridlock are welcome. By the way, are you surprised to learn that most German trade unions oppose the change in benefits policy?

Some of the information in the post is taken from The Wall Street Journal, 8 July, p.12.

Addendum: Here is a New York Times article about how Europeans are moving away from their ideal of a leisure society.


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