Changes in productivity and wages over the past decade mean that it is now cheaper for companies to hire workers in Germany than in Spain, says Morten Olsen of IESE Business School.
Between 2000 and 2008, productivity rates in Germany increased 13%, while in Spain they rose just 5%. At the same time, Spanish workers‘ pay climbed 38%, while German workers‘ compensation increased only 14%. Olsen questions the wisdom of Spain’s recently proposed austerity measures, saying structural issues in the country’s economy are more worrisome than the public deficit.
