5 pages due in 3 hours.... And i will Upload the previous sections

Germany Economic Conditions

Ahmed Allahyani

6/9/18

Germany Economic Conditions

In handling this project, I chose Germany as my country of choice. Germany has an approximate population of 82.6 million people and is among the most expensive countries to live in according to the OECD Better Life index. The German economy is one of the most advanced in the world, something that has earned the country a spot in the G7. Their service sector plays a critical economic role, especially in automobiles, tourism, finance, and banking industry.

In terms of measures of well-being Germany is ranked better compared to other countries. German citizens enjoy considerably high salaries with the cost of living being 74.8% higher compared to the United States (Siebert, 2015). The country ranks above average in personal well-being, earnings and jobs, health status, environmental quality, social connections, income, wealth, education, skills, work-life balance, personal security and housing, but in civic engagement, the country is ranked below average.

Germany’s modern and prosperous market economy is supported by political and economic stability, legal systems that are transparent, firm regulatory regime, skilled working force, exceptional communications and physical infrastructures, low business taxes, and competent capital markets. The country's trade goods for both imports and export are machinery, electronics, chemicals, jewelry, textile and vehicles. In an average household, the net-adjusted disposal income per capita in Germany is about$ 45,000 annually. The cost of living in Germany is among the world’s most expensive, thus higher compared to the United States. Munich and Frankfart are the country's most well-known expensive cities (Komlos et al, 2017). The consumer prices inclusive of rent is 41% higher compared to the US. The local purchasing power is also 0.08% lower and the restaurant price are 38% higher all compared to the United States. There is a very huge gap between the richest and the poorest. The 20% at the top of the population earn four times more as much as the 20% at the bottom.

The economic, automobile; tourism, insurance, and banking sectors employs over 75% of the workforce while over a fifth make up the country's secondary sector; trade, industry, and crafts. The agriculture or primary sector only employs approximately 3% of the labor force. The income distribution in Germany is that 10% of the populations are high-income earners with 80% belonging to the middle-class category and the other 10% being low-income earners.

Regarding employment, the country remains solid with 80% of individuals between the ages of 16 to 64 having a paying job. 84% of men have paying jobs compared to women at 75%. In German, the unemployment rate in May 2018 was only 2.4% a decline from 2.7% in the previous month. The unemployment rate among youths between the ages of 15 to 24 years is 2% which a decline from 2.2% in April 2018. In Germany, the law does not specify the average earnings or any minimum wage. In most case, the pay levels are usually agreed between the employee and the employer during the process of recruitment. This means that wages are determined by the open market, apart from some industries where collective labor agreements result minimum wages and worker rights.

According to input from OECD in 2015, Germany had the highest annual wages compared to other European countries, apart from Luxembourg. According to a research in 2018 by CapRelo, a relocation company, Germany has the highest average wages and lowest tax rates compared to the 41 countries that were surveyed, with an annual take-home salary of about $60,000. Collective bargaining agreements and the German minimum wage regulates employment terminations as well as holiday allowances (Tilly, 2015). The Gross salary is subject to taxes and a variety of deductions including social security which covers old age, pension schemes, unemployment insurance and more.

Besides the high average salaries, the worker's rights in Germany are better compared to other countries in Europe. The government sets a limit on the number of hours that employees are permissible to work. Office staffs are allowed 45 hours and 50 for other workers. Any overtime must be paid 125% of the usual wage. Workers are also allowed holiday allowances, those above age 20 are usually allowed by law four weeks per year and those below age 20 allowed five weeks, and for long-term employees, employers increase the amount. Salaries are reviewed yearly in Germany and are paid monthly 13 months equivalent per year. Accident insurance is mandatory for all German employees and is paid by the employers which cover illness or accident at work. The safety and occupational health are usually based on work and Accident act in Germany (Komlos et al, 2017).

In conclusion, the county boasts of highly productive, skilled and efficient workforce with a 99% literacy rate. German employees are known for their financial industry skills, education, and chemistry sectors. The skills available on the contrary, there is a high skill shortage in the hotel and restaurant, transport, information technology, healthcare, policing and agriculture fields.

References

Komlos, J., & Eddie, S. M. N. (2017). Selected cliometric studies on German economic history. Stuttgart: Steiner.

Tilly, R. H. (2015). The German economy during the nineteenth century. New York, NY: Berghahn.

Siebert, H. (2015). The German economy: Beyond the social market. Princeton: Princeton Univ. Press.