The Left is Rising in Germany

May 14th, 2012
in econ_news

Econintersect:  North Rhine-Westphalia is the most populous state in Germany.  Election results for a new parliament on Sunday (13 May 2012) produced a clear German-flagSMALLmajority for the center left parties (Social Democrats and Greens).  The center-right Christian Democratic Union (CDU, the party of Chancellor Angela Merkel) received the lowest vote total it had gotten in the state in 65 years, garnering just 26% of the vote estimated from exit polls and reported by the Financial Times.  The outcome is a “crushing defeat” (Reuters) for Merkel and comes from 22% of the German population.

Follow up:

Reuters reported that early projections give the Social Democrats (SPD) 38.9%, CDU 26.3%, Greens (11.8%) and the Free Democrats (FDP) 8.3%.  The FDP is a pro-business party that often aligns with the CDU (Reuters), but is called “the liberal party” by Wikipedia.  The total for the SPD and the Greens is more than 50%  so a coalition of these two parties should control the state parliament.

The New York Times reports that a fifth party, the Pirate Party which focuses on internet usage and other information technology issues, came in fifth with 7.8% of the vote. The totals given by Reuters add to only 93%, which leaves a significant number of votes unaccounted for.  According to Wikipedia there is a fifth major political party (not mentioned in the news reports out so far), The Left.  It can be assumed that if they received votes the number would be considerably less than the 7.8% mentioned for the Pirate Party.  Thus it is likely that much of the 7% missing in the early reports are split between the many smaller parties in Germany and The Left.

A week ago a report by Spiegel outlined where this resurgence of the left is coming from:  income inequality.  Just as the wages of workers in other countries, such as the U.S. have stagnated over the past decades while total income (and therefore income for the highest income levels) has risen dramatically.  From Spiegel:

It's a paradox: At a time when the economic elites in the United States and Great Britain are turning to Germany's recipes for industrial success as role models, the social structure in Germany is increasingly moving in the direction of a three-class society. This is a fundamental shift for a social market economy whose policies have long been aimed at ensuring that the country's prosperity is fairly distributed to all echelons of society. That system now appears to be eroding fast.

These days, it is executives, with their compensation skyrocketing into the millions, who are at the top. The second tier consists of the well-trained and reasonably well-paid legions of white-collar and skilled workers in modern information and industrial societies. Bringing up the rear are professional groups that were once considered part of the core of the traditional working world: salespeople, cooks, waiters and teachers, for example, who often earn less now than they did a decade ago.

The move toward the left follows a similar shift in French elections a week ago that saw the election of Socialist Francois Hollande.

John Lounsbury


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