Rising Global Unemployment Rates…Why is Germany Different?
As per the report about unemployment in the euro zone released this week, unemployment rates in Europe in certain countries are approaching 50%. This means that half of the eligible work force cannot find jobs which is hugely distressing for countries such as Spain and Greece. The U.S. has lower unemployment numbers, however, it is unclear what percentage of those who exhaust their unemployment benefits are still counted.
However, Germany and Austria have a mere unemployment rate of 8%. Fascinating. Why? They are European nations, yet are doing things right. When I am in Germany with my global clients, I have a clearer understanding of the reasons why this is. Investing in the people and in the future health of their country. There are more rigorous retraining programs in Germany than anywhere else, and when things get tough, instead of laying people off, German companies reduce wages and add training for building for the future.
In the U.S., we downsize instead of plan for the future. The cash reserves in many companies are massive, however, I am seeing more U.S. companies cut training programs to save money and make the stock look strong by cost cutting. By not investing in the future, we are not only not creating a vibrant future economy, but we are not equipping folks for a changing working landscape. We should also remember that we (US) are most likely the largest outsourcing company. This means that instead of revitalizing some of our decaying states and cities, we are sending the jobs out completely to other countries. For example, we are not revitalizing Detroit (where we could easily have a thriving call center, hundreds perhaps) but instead we are sending jobs to Asia in droves.
The combined effects of our cost cutting decisions have huge future complications.
How could we do things differently:
1. Invest in our current staff AND train for the future. Be long term motivated versus looking for short term gratification.
2. Begin to look at revitalizing our U.S. economy vs. outsourcing as the only measure of growth and cost cutting. States are willing to give huge tax incentives to bring job into the state, so let’s disrupt the current model.
3. Look at outsourcing when needed but not as the key way to grow.
4. Disrupt to innovate and invest in innovation for the future.
Would love to hear your thoughts…What do you think?
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