Germany, U.S.: A tale of two secretaries

Jessica Abad is an executive secretary at Detecon Inc., a German telecommunications firm based in Bonn.

 Amy Loschy is the secretary at a Detecon branch office in New Brighton.

 Both women are in their 20s, smart and bilingual.

 But when it comes to their employment benefits, they are worlds apart.

 The reason: German labor and social benefits are among the most generous among advanced western nations, while U.S. labor and social benefits are among the least generous.

 Germany, considered the founder of the modern welfare state, began assembling its social insurance system in the 1890s to protect workers from wage loss due to age, illness and unemployment. Likewise the powerful labor movement in Germany, and its unique system of labor-management, has shaped the wage and benefit packages of nearly all German workers.

 In contrast, the U.S. government provides for comparatively few labor benefits. With only 15 percent of the U.S. labor force unionized, it has the lowest collective representation of workers in the developed world, according to Richard Freeman, director of the labor studies program at the National Bureau of Economic Research.

 It's a big reason that Americans receive low pay compared with workers in other advanced countries. At 1992 exchange rates, hourly compensation was 60 percent higher in Germany than in the United States, 50 percent higher in Sweden, 44 percent higher in Switzerland and 36 percent higher in Belgium, according to Freeman.

 But there's a price for the workers' paradise. Germany's generous welfare and worker benefits have made labor costs so high that firms are hiring fewer workers and/or moving to cheaper Eastern European labor markets.

 "What is good for the employee is not necessarily good for the whole economy," said Uli Hahn, a Detecon vice president based in Minnesota. "The load an employer has to carry is much higher in Germany than in the United States. It limits flexibility. Here the flexibility opens new chances and makes industry more competitive. 

"But here someone can lose a job quickly, and there's nothing," he said. "This is not OK. A person should at least have a certain time to survive."

 Here's what the benefits mean for ordinary workers.
 
 

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