There's a Right Way and a Wrong Way to Deal With a Jobs Crisis -- Why Is Germany Doing It So Well?

By John Schmitt, AlterNet
Posted on May 30, 2011, Printed on May 30, 2011

The Great Recession hit harder in the United States than in most of the rest of the world. Among the world's rich economies, we experienced the third largest increase in unemployment, trailing only Spain and Ireland. Most advanced economies saw substantially smaller increases in unemployment and one --Germany-- actually saw its unemployment rate decline.

Can we learn anything from countries that weathered the Great Recession better than we did? The experience of two countries --Denmark and Germany-- seems particularly informative. Denmark had a model labor market before the downturn, but ironically, offers a cautionary tale. Germany's economy has been up and down since unification in the early 1990s, but points one way out of our mess.