Germany has opted for a strategy of labour market polarisation

Labour market polarisation (the concentration of jobs at the two extremes : high-skilled and low-skilled) can be observed in all OECD countries. It reduces social mobility and increases inequality. In the OECD as a whole, it is an undesired trend with negative consequences. But labour market polarisation has long been Germany’s model, with its high-end industry that pays high wages and offers protected jobs on the one hand and a services sector that pays low wages in low -protected jobs on the other. Germany has so far tolerated this form of polarisation, which sets it apart from the other OECD countries.