The debates over the concept of a just society bring differing approaches to freedom, liberty, fairness, and the role of the state and the responsibilities of the individual. The argument is also about the content of the collective good. While the battle ground in the United States over these challenging issues looks somewhat different than it does in Germany, what is evident is the shared concern about growing inequality in society and how to deal with it.
Germans and Americans both believe in the value of opportunity, be it for themselves or their children. This is the basic cornerstone of the American narrative, where people should have equal opportunity to rise—or fall—when given a fair chance. Germans share that value, but they may not be so comfortable with the negative side of opportunity. While Americans preoccupy themselves with equality of opportunity, Germans emphasize equality of conditions more readily. Yet the current debate about inequality needs to combine both dimensions if there will be an effective response.
In the larger context, inequality is a global trend. The growing gap between expanding prosperity spheres and poverty pockets within and across countries and regions is of concern in both developed and developing societies. The transformations occurring within the economic structures of developed countries have seen parts of the population left behind while others become wealthier. There has been a significant rise in the global middle class, while inequality of income and conditions associated with it remain stubbornly present. Responding to this challenge will be a challenge for all societies.
How are Germany and the United States responding?
Germany’s extensive social welfare system was built up over many decades to support take offs and smooth landings—until it got to a point where it was getting too expensive. Germany spends more on its social welfare system than does the U.S. In Germany, around 27% of GDP flows into social welfare spending compared to just 17% in the U.S. But in 2003, Chancellor Gerhard Schroeder, a Social Democrat, stepped up to put some brakes on that system with his so-called Agenda 2010. Yet, according to some recent opinion polls, the majority of Germans feel that their society is not a just one, and that the degree of inequality is growing. Measured in terms of income or wealth distribution, it may not be as visible to the normal observer when passing through the strongest economy in Europe—a country that also manages a huge system of transfers to its citizens. However, the danger signals which some are highlighting have more to do with the degree of social mobility in the society. These concerns have raised questions about how much opportunity an individual has to move upwards in his or her life, or as some experts put it, to catch the elevator up, and what tools are available and needed to everyone to accomplish that. Recent reports in Germany are warning that upward mobility is being stymied more today than in the past. Why that is happening and who is affected is a contentious debate. Is there a growing group of working poor in Germany? Are barriers to the elevator more in front of immigrants?
The same debate has been gaining traction in the U.S. for reasons that are in part similar and in part a product of a different mentality and history. In the United States, the concentration of wealth distribution has become enormously skewed at the cost of creating a severely divided society, based not just on money but also on security of jobs, health, housing, protection against crime, and old age. It used to be said that although Americans were perhaps in different parts of the ship, some in steerage and others in First class, we would all be able to travel together in the same boat. Or to use another related metaphor, a rising tide would lift all boats. That description does not capture the current picture of the United States in which income and professional mobility have become increasingly constrained and asymmetrical. According to Joseph Stiglitz, the number of Americans living below the poverty line is now one in six, with more people having difficulty escaping from the vicious circle of what he has called the poverty trap.
The Role of Education
One key to escaping from the vicious circle lies in educational opportunity. And in both Germany and the United States, there is growing concern that those at the lower levels of society are getting fewer chances to secure the kind of education needed to compete.
Germany has been focused on reforming its educational system for several years after a report from the OECD—the Pisa study of 2001—shocked Germany with poor results on their educational system being well below global averages. The study triggered a debate on a cross section of issues including not only educational policies, but also questions surrounding family policy and the integration of immigrants. That conversation has been continuing ever since.
The latest report on German poverty compiled by labor Minister von der Leyen argues that Germany looks pretty good in comparison to other European countries, particularly when measured against the low unemployment rates. Yet there is reference to a growing wealth gap as well. The report documents that the richest ten per cent of households possess more than fifty-three per cent of the overall net assets, while the lower half of households owns just one per cent. The concern with these kinds of gaps is the impact it has on educational opportunity, which is shaped by the family, class and social background of generations. With the increasing premium placed on educational skills in a transforming economy, Germany is struggling with the challenge of “leaving no child behind” just as is the United States.
The American picture looks far more dramatic. The unemployment rate among those with college degrees is far lower than those with only high school degrees; those with neither a high school nor college degree are far worse off than their peers. The high school graduation rate in the U.S. now stands at 75%. The fact that the cost of education is skyrocketing adds to the hurdles one has to go through to achieve a competitive education. The severity of unemployment has increased, as have the conditions in which those searching for jobs are coping. The challenge of catching the elevator up in American society has become more difficult to overcome.
The Race for Answers
Looking at the framework in which the debate about responses to these developments takes place, one cannot overlook the differing starting points in Germany and the U.S. While both countries can boast having some of the best educational resources in the world, they are also facing the challenges of including the broadest societal base possible into them. The changes in the labor force and the global demands on skills is generating a race to both the top and the bottom, the latter leaving those unable to cope with the transformations around them behind. While that danger is more widespread in the United States, Germany is confronted not only with maintaining its highest standards at the top of the pyramid, but also worrying about those in the basement. Both the U.S. and Germany are going to need better and larger elevators.
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