German Papers: Berlin Wants To Wage War on Wage Dumping

Germany's main political parties and labor unions all agree on something for once: a minimum wage could help preserve German jobs from wage dumping foreign workers. But will it work? German papers offer mixed reactions.

The construction industry is the only one with a minimum wage. That may soon change -- but is that a good idea?
DPA

The construction industry is the only one with a minimum wage. That may soon change -- but is that a good idea?

German Chancellor Gerhard Schroeder's Social Democrats, the opposition Christian Democratic Union and organized labor agree on something for once this week: the need to protect the German job market against cheap labor from Eastern Europe. In the meat-processing sector alone, one newspaper notes, more than 20,000 jobs have already been lost to Polish workers. In response, the federal government is considering extending its so-called "Employee Assignment Law" to other industries. The law, which currently applies only to the construction industry, forbids employers from paying foreign workers less than the minimum wage fixed in standard union-negotiated wage agreements. SPD Chairman Franz Muentefering calls it "a good suggestion," and CDU chief Angela Merkel says: "We can't just accept wage dumping." But Monday's editorials offered no clear opinion on whether a minimum wage could actually stem the tide.

The center-right Frankfurter Allgemeine Zeitung, is steadfastly free-market minded in its assessment of the situation. "Forgotten are the noble words the chancellor used in celebrating the eastern expansion of the EU a year ago," when he called on everyone to work together. Although unemployment figures haven't changed much since then, says the FAZ, people are alarmed because unemployment quickly turns into a welfare situation under new laws. "The labor force in the new EU countries, who want to avail themselves of the small freedoms offered by the common market, are being made to feel this," admonishes the paper. It adds that politicians and labor unions are building a fence to keep out the competition, which "should no longer be allowed to play out their most important competitive advantage -- more modest wages -- and instead would be forced into German pay levels." All this has nothing to do with fighting illegal employment, but rather with diminishing wage competition in the German market. But "market forces can't just be overridden," concludes the FAZ. Forcing inflated minimum wages by law will only lead to a further loss of jobs.

Another business daily, the Financial Times Deutschland is more circumspect. "As a political gesture, these minimum wage requirements may help to assuage the fear for their jobs that workers in Germany have." In reality, however, they have little effect, opines the paper. They are useful, however, in the fight against illegal employment practices, says the paper, "but only if legal inspections are expanded further than currently planned." At least employment in this industry is growing. By the end of 2005 the "Finance Inspection for Illegal Employment" office will have 7,000 employees.

The topic is a natural for the left-leaning Die Tageszeitung and its conclusion doesn't disappoint. The paper is amused by the "remarkable alliances" that have formed to combat job loss to cheap foreign labor. But rather than join such an alliance itself, the paper ruminates on why a minimum wage wouldn't solve the problem. The minimum for one area of Germany may not be enough for another. Too low a minimum wouldn't encourage people to work and too high would send legitimate work under the table. The real problem is that the country's social insurance taxes effectively price German employees out of the market. The paper's proposed solution: "Rather than a minimum wage, it would be more sensible to fairly distribute the burden of social insurance costs. Rather then weigh down the workers with the mammoth share, income from rent and investments should be included."

The Berliner Zeitung, whose publishing history dates from the communist-era in East Germany, uses the opportunity to snipe at the US. It recounts the history of the minimum wage under President Roosevelt. "The goal of the minimum wage was not just to secure a minimum subsistence level, but, rather, to make a 'decent life' possible. However, then and now, that remained little more than a dream for many workers in the USA." It goes on to note that 18 of 25 European countries have extremely varied minimum wages in place. It doesn't expect to see a minimum wage laws anytime soon, but predicts "a succession of regulations to protect the German market from new, cheaper workers."

Some World War II aggressors seem to be better than others at dealing with their past sins. While Germany solemnly marked the anniversary of the liberation of the Buchenwald concentration camp this weekend, Japan faced the fallout from a new history textbook which allegedly glosses over the wartime atrocities committed by Japan against the Chinese. Sick and tired of the unapologetic manner with which Japan presents its past, thousands of Chinese took to the streets this weekend.

Most of Germany's editorial writers questioned the motives of the Chinese government in actually allowing its citizens to protest something. At the same time, they acknowledged that Japan isn't really in a moral position to demand an apology from China for this misbehavior.

The center-left Sueddeutsche Zeitung observes the intoxicating effect of self-righteous hatred that nationalistic protesters in China and South Korea are feeling, whether while protesting the ownership of an insignificant archipelago or "a history textbook that few Japanese students will ever see." While the paper finds the weekend protests in Beijing thoroughly unsympathetic, it adds, "without approving of such eruptions, the anger of the students isn't totally excessive and without basis ... With every visit to the Yasukuni shrine, the center of Japanese nationalism, every defense of bad history books and every anti-Chinese commentary, (Japanese Prime Minister Junichiro) Koizumi's government has poured oil on the fire." The paper finds Japan's missteps in dealing with its bloody history even less sympathetic than the protesters in China. It concludes: "Tokyo's reaction to the protests in Beijing are void of all manner of self-criticism. There one believes that enough has been done in processing history. And overlooks that this conclusion does no justice to the heirs of the perpetrators."

The business daily Handelsblatt worries that China is using feelings of nationalism to unite its people and keep them from thinking about problems within their own country. It says, "they aren't allowed to take to the streets for democracy and human rights or against the growing social divide. But it's okay to protest against Japan. And that's how the emotional protest against the neighbor came to be used by the government as an outlet for outrage over very different issues." The paper says the protests have gone too far, but adds that "the Japanese government would be well-advised to stop glossing over its past so that in the future there is no danger of China exploiting such emotions again."

The conservative Die Welt cautions that China's tacit support of the protests to make a point to Japan may just backfire. "Only too often did anti-Japanese demonstrations in China suddenly turn into inner political revolts against the national government. Then Beijing would be pilloried and not Tokyo."

In this spirit, albeit with an odd and mixed metaphor, the center-right Frankfurter Allgemeine Zeitungsays, "it would be welcome if the virus of freedom would spread among the Chinese," and that it would be the equivalent of China scoring a soccer goal against itself. It goes on to worry that the nationalism that the Chinese government is quietly encouraging is "an emotion that East Asia doesn't need." Finally, it warns that "Europe's wannabe arms exporters should keep this in mind before they make decisions under which many Asians could suffer."

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