German Jobs ‘Miracle’ Comes at a Price for Recovering Economy
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Germany’s “short-work” policy showed the world how to survive a recession without losing jobs. Now it’s time to pay the price.
The country’s social welfare-driven economic model, which the International Monetary Fund says is helping to preserve labor-market rigidity, has sheltered it from the worst of the financial crisis. The cost is that as the economy recovers, hiring won’t pick up as much as it does in countries such as the U.S. or the U.K., posing a risk to growth in a nation that needs to ignite household spending.