Wednesday, November 02, 2005

Duetsche Telekom to Lay Off 32,000 Workers

On top of the 11% unemployment that Germany is already suffering under, Duetsche Telekom announced today that it will unload 32,000 workers. Given the state of the German economy, and that DaimlerChrysler and Siemens are also shedding workers, the job prospects for these folks are dim. Within Germany that is. Strong European economies, like Ireland and Spain, are absorbing workers. Leaving aside the horizon-broadening that comes with travel, it is not an enviable situation to be faced with having to leave your country to find work. (I know, Mexicans do it all the time. Germany is not Mexico, however, it is the world's 3rd largest economy.)

One of our great blessings in this country is that our federal republican (small r) system allows for policy variance among states. So if a state pursues economic policies that yield bad results, chances are great that there are other states that have pursued substantially different polices that offer better prospects to make a living (like my state, NY, which has been losing its citiznes to the south, west and southwest for decades). So people can pick up and move and not have to leave their nation's borders. Not so in Europe. It is mostly an all or nothing thing, policymakers either get it right or they get it wrong for the whole nation, and better prospects lie beyond national borders. The integration of the EU may be easing the movement of people between places like Germany and Ireland, but the increasing centralization of economic policymaking will sterilize the gains. If the EU apparatus squelches the policy competition between member states, the free flow of people won't be of much use. Policymakers will just be getting it right or wrong for the whole of Europe rather than for its constituent parts and there will be no outlet countries if things go badly. While a New Yorker might feel out of place in Arizona, it's smooth sailing compared to a Liepziger having to make do in Cork.


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