Even under current conditions, German manufacturing has somehow stayed competitive and is booming, and workers in skilled trades are doing well there. I haven't quite figured that one out.
Several good reasons for this, actually. First, Germany's economic and political history through the Great Depression was very different than the US and Great Britain. While the US and the UK initially tried to deflate and liquidate their way out of the Depression, causing business and union leaders to run head-first and fist-first into the stickiness of wages (workers really don't like wage cuts, even/especially if their wages increase in value over time), Germany unwittingly inflated their way out of it, avoiding the worst of the business-labor conflicts of the Great Depression. This prevented German business leaders and unions from developing the adversarial relationship between business and labor that developed in the US and the UK, which allowed German businesses to grow and boom long after World War 2 and even during the '70s when Japan started getting its house in order. This also made it possible for German factory owners to employ the latest labor-saving technologies to preserve productivity and quality while many heavy industry unions in the US and the UK viewed those technologies with suspicion and blocked them at every turn.
Second, Germany's economy is subsidized by the Euro. There's a reason Germany's sort of willing to bail out the PIIGs - if they don't, people in the PIIGs won't be able to buy as much German-made stuff. Normally, Greece, Italy, and so on would watch their currencies devalue in times of fiscal crisis, making imports from Germany less attractive to their citizens and making locally manufactured goods more attractive. By staying in the Euro, though, that devaluation isn't happening - instead, German-made goods from high-tech factories compete on even currency footing with goods manufactured in limited quantities in their troubled home countries using less cutting-edge technology, less educated labor, and owned by business leaders who are uncertain about their country's future and invest accordingly. Guess whose goods win out? Coincidentally, this is a big part of the reason Germany's running trade surpluses right now.
Third, US manufacturing isn't in anywhere near as bad of a position as people think. No, it's not where it was in the late '50s and the early '60s when we were the only advanced country with an intact industrial base and transportation network on the planet. But, it's not like we don't make anything in the US anymore. There are probably at least as many cars made in the US now as there were in 1970 - difference is, they're being manufactured for Toyota, Honda, BMW, VW, and (soon) Kia instead of GM, Ford, Chrysler, and American Motors. There are some industries that have largely vanished here - we don't really do textiles anymore, except in certain niche applications, and though we still produce a fair amount of steel and other metalworks, we're not manufacturing them to anywhere near the volumes we used to. On the other hand, we do still manufacture several higher-end electronics parts (though we don't often assemble them); Intel, for example, has several manufacturing plants here, among other things. Long story short, no, American manufacturing isn't the golden ticket for high school dropouts that could move a screwdriver like it was when we were the only producer of goods on the planet, but that doesn't mean it's dead. It just isn't what it used to be compared to the rest of the American economy. That doesn't mean other countries (even China!) wouldn't kill to produce as much stuff as the US does.
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