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Supporting the growth-driven approach: Short-term pain, long-term gain

Published July 25, 2026 at 7:02 AM UTC

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Supporters of Germany's current economic strategy argue that the growth-driven approach is sound, even if poverty hasn't fallen yet. The economy's resilience creates a foundation for future wage increases. As companies invest and compete globally, they will eventually need more workers, driving up pay. The recent labor shortages actually signal tightening conditions that could boost wages. Moreover, Germany's strong export sector and low unemployment provide fiscal room to fund social programs. The government's targeted aid, such as the energy price cap and child benefits, are temporary measures that cushion the blow without stifling growth. While inequality is a concern, a growing economy is the best tool to fund education, infrastructure, and redistribution. Without growth, poverty would likely be worse. The priority must remain on competitiveness and innovation, which ultimately raise living standards for all. Critics ignore that many Germans have benefited from stable jobs and pensions. The current path, while imperfect, is the most sustainable way to reduce poverty over the long term.