German 'good life' has its price Spend and tax: There's only one thing to match the breadth of government services, and that's the tax bill.

Sun Journal

November 20, 1995|By Dan Fesperman | Dan Fesperman,SUN FOREIGN STAFF

BERLIN -- In Germany, the sturdy net of government service stretches wide and deep.

So does the tax bill.

Consider health care, for example. National health insurance covers one and all, cradle to grave. No one ever receives a bill or pays a penny out of his pocket, whether for a broken leg, a nursing home or an incurable disease. And only rarely does anyone complain about the quality of care. (With the exception of dentistry. Germans have notoriously rotten teeth, with dentists to match).

Taxes to match

But for any American who grinds his molars at the thought of "tax and spend" government, this might seem a place of horrors. Nearly half the average salary ends up in the government's pocket. Granted, budget crises are rare; government shutdowns are unknown. But still intact is the principle that government should spend generously and tax heavily.

Begin with the salary for the average German worker: a robust $33,000 per year. Income taxes take an 18 percent cut, and social security takes another 16 percent.

So far, it doesn't sound like so much money.

Then come the "indirect taxes" -- $2.60 on each gallon of gasoline, and the 15 percent value-added tax on consumer goods, including food. In the course of a year they take another 10 percent from income and leave the average German with about $18,000 to spend annually, about 55 percent of his paycheck -- and that's before paying a host of nettlesome annual fees, such as $200 for each television and radio in the house.

The totals don't seem as daunting when you consider what they buy. Start adding the cost of the German benefits to the deductions on an American pay stub -- out-of-pocket health expenses, for example, or contributions to college funds and retirement accounts -- and one might even stop grinding one's teeth.

Leisure empowerment

But if there's a single thing that characterizes the German system of social democracy best, it's the emphasis on paid leisure time. No one is more empowered to loaf than the industrious Germans.

On average, a German stays in college until age 29 (with the government paying virtually all tuition and fees along the way, after 13 free years in a generally excellent public school system).

Retirement comes at age 59, on average. Then come the benefits of the government pension, set at roughly 60 percent of the salary earned during the final year of employment. That's supplemented by all the free health care.

Add up the years of labor, and the average German is in the work force for three decades, or 13 years fewer than the career of the archetypal American college graduate who works from age 22 to 65.

Along the way, Germans get an average of six weeks' paid vacation per year, plus at least 12 paid holidays. Most can also take advantage of a "self-improvement" guarantee that allows up to two additional paid weeks off per year. And, no, the learning you acquire during these two weeks doesn't have to pertain to your job. One court ruled that a hiking trip across German mud flats fits the definition.

This would appear to leave little time for sick days, but the German work force manages to use them anyway. Postal workers routinely log more than 20 per year.

Solution for stress

Still, some workers inevitably become overstressed, and when a doctor prescribes three weeks' relaxation at a pricey health spa, expenses are paid by national health insurance and salary is paid by the employer. You're not allowed to take advantage of this option every year.

Add up the possibilities, and the average German can claim up to 13 paid weeks off in a single year, not including sick days.

All this idleness brings tangible rewards. Most German employers routinely pay an extra six weeks' salary as a "vacation bonus." At Christmas, workers usually get an additional month's salary.

Even when Germans are on the job, the average workweek is less than 40 hours, another reason the average German manufacturing worker puts in 1,665 hours per year, compared with the 1,912 hours of his U.S. counterpart.

Recently, some of the country's biggest employers have grown stingy about wage increases. Some also have laid off tens of thousands of workers. Germans talk of a "social contract" between labor and management and sugar-coat descriptions of it. But there does still seem to be a mutual respect. It would be considered barbaric, for instance, for a company to lay off employees while turning a profit.

70-cent letters

This German way of doing things is expensive. Those leisurely postal workers, for instance, charge about 70 cents to mail a standard letter.

But wages are generally high enough to pay the way, even though Germany has no minimum wage. The absence of direct health care costs and of college tuition means that even a shop clerk can make a decent living. The U.S. phenomenon of the "working poor" is virtually unheard of.

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