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The cost of manufactured goods has held stable so far largely because of increases in productivity. An additional factor is the stern self-discipline of German trade unions. Rarely is there a crippling strike of the kind so common in Britain, France and the U.S. Jurisdictional disputes are unknown because all workers in every factory belong to the same union. Apprentice training is plentiful, opposition to labor-saving machinery negligible and wage demands customarily modest.
New Flag. Now a severe labor shortage has made the workers somewhat more independent and demanding. There are 763,000 unfilled jobs as against only 155,000 people looking for work Unemployment runs a low 0.7% of the labor force, which includes a record 1,300,000 Spaniards, Italians, Greeks, Turks and other imported workers. In wage negotiations so far this year, the unions have won increases averaging 6%. As a result, the consumer is stepping up his spending for wine and liquor (up 12% from a year ago), autos (up 17%), and appliances (up 18%).
Increasing affluence has only lately given the ordinary German something close to a middle-class U.S. standard of living. Four years ago, most Germans were content with midget refrigerators; today, 5-ft.-high U.S.-style models are commonplace, and dishwashers are rapidly losing their distinction as talismans of prosperity. The historic German habit of thriftiness is battling with a rising appetite for luxurious clothes, food and travel. If the airline ticket has become Germany's new flag, foreign food—often purchased in a fancy restaurant—is the national symbol. Germans marvel at the change in their way of life. "It's funny," says Lisl Gulewyz, a Munich hotel manager who recently spent two years in Zurich. "Once Switzerland seemed the epitome of neatly spread prosperity. Now, compared with the Federal Republic, it appears oddly shabby and unbalanced."
For all this prosperity, Germans are sorely troubled by government forecasts that the rate of inflation will rise to 3% this year. That figure would cause hardly any concern in most industrial nations, but it seems alarming to a people who remember that inflation has demolished the mark twice in the last 46 years. A step-up in price increases could well cause German unions to demand greater wage rises in negotiations this fall, adding still more momentum to the spiral.
Rejected Revaluation. Economics Minister Karl Schiller has tried vainly to persuade the government to raise the value of the mark by 6¼%. Such action would have cut exports by increasing the price of German goods abroad, and would have lowered prices at home by reducing the cost of goods that Germany imports. Chancellor Kurt Kiesinger rejected revaluation at the time because he feared that he might thereby lose Germany's September election.
If Germany waits too long to revalue, the consequences will be further price rises. It seems inevitable that the mark must be pegged upward some time in the not distant future. In the interim, warns Schiller, "we must bite the sour apple of domestic instability." And of international instability too. As long as the mark remains undervalued, it will be a constant source of trouble for Germany, and for many other nations as well.