Paying Germans More Is a Win-Win for Euro

Paying Germans More Is a Win-Win for Euro

While the German government can make a plausible case against fiscal stimulus – its public debt is very high and its population is shrinking – there is no case for not acting to push up wages. The government could introduce a national minimum wage. It could also support trade unions in their pay talks with private sector employers, while signalling to business that tax on profits could rise if wages are not allowed to move towards their (higher) equilibrium.

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