[Excerpt] Competitiveness for firms is possible via the high road or low road, or some combination of the two. For a nation, however, if competitiveness means the ability of a country's firms to sell on world markets while contributing to rising average incomes and living standards at home, then only the high road will do, especially for advanced industrial societies such as Germany and the United States. The tragedy of today's touted "American model" is that it is based too much on the low road, and as a result includes growing income polarization and a deep "representation gap." American workers, in spite of the long 1990s miniboom, don't earn enough and don't have enough voice in the workplace. The decline of the labor movement has gone hand in hand with growing economic and social polarization.
Perhaps the best remedy, and certainly the one that allows workers themselves to solve these problems, is a revitalization of American unions. In today's world economy, union revitalization requires both the capacity to organize and mobilize and a proactive willingness to use new strength and representation to contribute to firm and national competitiveness. German unions are strong to the extent they can do both of these, within an institutional environment that is far more supportive than that in which American unions must operate. German unions today, however, among many other problems, are being badgered by employers about the virtues of the American model, which in part means "roll back the unions," to drive down labor costs and raise productivity. On their own turf, German unions have done a good job fending off the attacks. However, in the long run, their continuing influence may well depend on the strength of unions in other countries, throughout Europe and elsewhere. Especially in the United States, where a revival of the labor movement could do much to revise the American model and remove downward pressure on the German high road. The revitalization of the unions in the United States, therefore, is important not only for American workers and society, but for German unions and society as well. Economic growth and improved productivity and firm competitiveness may not require strong unions in the U.S. or Germany, but as past performance in many countries has shown, neither are strong unions incompatible with growth, productivity and competitiveness. Strong unions, we do know, raise wages, improve benefits and employment security, and offer protected representation in the workplace, all of which are all too often missing in the American workplace.
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