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How Does German Economy Compare to United States Economy?

Some of our readers may have grown up with the idea that Europe is full of homeless countries, which are run by corrupt and incompetent socialists. Although this may indeed be the case in some cases, Germany, Europe ’s economic powerhouse, has now become the world ’s fourth-largest economy, second only to the top-ranked United States.

Today, we will compare two economies, the American economy and the German economy. In 2016, the United States accounted for about a quarter of global GDP at US $ 18 trillion, while Germany accounted for 4.4% at US $ 3. 4 trillion.

To be blunt, the United States has overtaken Germany in size and population, with a population of approximately 325 million and a land area of ​​35 million square miles (3,531,837 square miles), while Germany has a population of 82 million and a land area of ​​135,000. Square miles (134,580 square miles). The labor force in the United States is 1.586 million and that in Germany is 45.3 million.
Overall, the cost of living in Germany is about 11% cheaper than in the United States, which is comparable to the salary difference.

The per capita disposable net adjusted income of ordinary German families is US $ 31,925, compared with US $ 41,071 for Americans. The gap between the rich and the poor in both countries is large. The income of the top 20% of the population in Germany is more than four times that of the bottom 20%. The highest income 20% in the United States is 8 times the lowest income 20%, which is shocking.

As of January 2017, the national minimum wage in Germany is US $ 9. 79 (8.84 euros), and the minimum wage in the United States depends on each state and whether the job can earn tips. Germany has a reputable export market, and the value of exported goods is US $ 1. In 2016 it was US $ 33 trillion. Of which 70.5% are composed of its top ten export products: (1) vehicles, (2) machinery including computers, (3) electrical machinery and equipment, (4) pharmaceuticals, (5) medical products, (6) plastics, (7 ) Aircraft and spacecraft, (8) steel products, (9) fossil fuels and (10) organic chemicals. The fastest-growing category for Germans is automobile exports, followed by aircraft and spacecraft.

In the same year, US exports were only slightly higher than those of Germany, at US $ 1. 454 trillion US dollars of commodities were delivered, which is only 7.8% of the total economic volume. The top 10 US exports in 2016 were (1) machinery including computers, (2) electrical machinery and equipment, (3) aircraft and spacecraft, (4) vehicles, (5) fossil fuels, (6) medical products , (7) plastics, (8) precious stones and precious metals, (9) medicines and (10) organic chemicals. Professor Bernd Venohr of the Berlin School of Economics said: "The United States focuses on the mass market and quantity, but Germany is the king of niche markets." Germany has a strong manufacturing industry, accounting for about a quarter of the total economy, while the United States only accounts for Twelve percent.

Germany ’s success depends on two important advantages. The first is that their commitment to manufacturing is to support training and provide technical apprenticeships and vocational training, as well as subsidized schools. They also gave the company a punishment for firing workers. The second reason is that their corporate income tax rate is low, which is beneficial to investors and companies, who can more easily reinvest and raise funds.

Despite President Trump ’s criticism of Germany ’s unwillingness to spend more on defense and an endless trade surplus, in the Obama era, government policymakers were seeking German guidance to help them double the country ’s export growth, which was at the time Promise of. Chairman. A large part of Germany's export and manufacturing success is due to its large number of medium-sized or small and medium-sized enterprises, which have fewer than 500 employees and annual sales of less than 50 million euros.

In the United States, 99% of companies are small and medium-sized enterprises and employ about two-thirds of the workers. In the United States, even if the percentage of small and medium-sized enterprises is the same, they only employ about 50% of the population. German workers have access to affordable, high-quality medical services, which many American small and medium-sized enterprise workers may not have, and if they do, their quality will be poor. The government's decisions and policies affect the economy and quality of life of its people to a great extent.

Germany maintains integrity in the decision-making process and government agencies, is accountable to politicians, and corruption is reduced, so its government is more effective than the United States. Germany ’s young population is one of the countries with the lowest unemployment rate in the world, and enjoys high morale in the workplace and a high quality of life. Therefore, compared with the United States, the German economy has maintained rapid growth, this fact makes People are convinced.

However, you may be wondering how the US GDP and employment statistics have been manipulated due to the low corruption ratings given by the World Bank, World Economic Forum and Transparency International. It is safe to say that the United States can learn a lot from Germany in terms of the German government and economic policies. In fact, if the US government does not spend money on health care and medicine and spends $ 3, Americans may become richer. Investing US $ 4 trillion in the wars in Afghanistan and Iraq, providing fossil fuel companies with billions of dollars in tax breaks each year, and destroying electric engine designs in the past can eliminate dependence on Middle Eastern oil.

So how will these two powerful economies develop in the future? Although the US dominates the global economy, it may not last long. In 2016, the growth rate was only 1.6%, far behind China ’s 6.7% growth rate, and China ranked second only to the United States in the ranking of the highest economies. Since the last crisis, Germany ’s quality of life has never reached such a high level, and the economy has almost completely recovered. However, despite its strong development by European standards, its economy may face some challenges in the coming years due to the refugee crisis and the implementation of Brexit.

So, which country do you think has greater growth potential in the future? Can Germany improve its ranking in the next few years? Let us know in the comments!
How Does German Economy Compare to United States Economy? How Does German Economy Compare to United States Economy? Reviewed by ViralBlossom on April 24, 2020 Rating: 5

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