During my years in Germany, particularly since I retired, and have more time to find out how the state works, I keep finding crazy social logic.
One aspect was that earnings from increases in share prices were not taxed. Of course this encouraged speculation, rather than investment in stable firms that pay a good (but taxed) dividend. This changed at the start of 2009, decades too late. “Last chance” German investment before then may have contributed slightly to the financial crisis. But I want mainly to comment on two recent news items.
I often heard that pensions are coupled (more or less) to average earnings. This seemed very reasonable. The pensioners win and lose in step with the people who are financing their incomes (solidarity). Of course I noticed some time ago that there are (at least) three different pension systems, with resulting unfairnesses. For instance skilled industry workers (including some foreigners) whose exports permit a high standard of living in Germany are made to subsidise unskilled workers, while civil servants have enough influence to avoid this.
But only recently (SZ last week) did I find out that “average earnings” are strangely calculated. For instance people are not included if they are out of work. So short-time working tends to reduce pensions, but redundancies coupled with overtime working by the others tend to boost pensions. Some of this problem has been avoided, not by making the calculation more logical, but by an extra rule that pensions never sink. This again will need correction if a real crisis develops. Does this relate to the fact that pensioners are more than a third of all voters, and an election is coming?
The other crazy (dishonest) thing I heard recently is that a graduate earns on average in a lifetime about €130,000 more than a non-graduate, (more for a man, less for a woman); so “(university) education pays for itself, and is a good investment and should be state-supported”. I bet this argument came from FDP or CDU. This is a dishonest attempt to benefit those already privileged. Graduates would surely be more able (on average) than the rest, with or without their university years. Perhaps they would earn even more if they started sooner. Anyway education experts know that investment in education for small children can bring much better returns. They profit most from good education, and a good education for them does not require hugely intelligent highly educated highly paid teachers. It requires reasonably intelligent, reasonably well paid loving teachers with the right temperament. University education is particularly valuable for a woman, because the effects pass on (more) to her children.
Of course I am not against universities. Five years at the third best of all universities honed the analytical skills that have enabled me to earn as much as a good plumber and to cast pearls such as this.
I would be grateful for comments, particularly if I have made mistakes.
cw
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