Cash in Germany and the U.S.

Posted July 18, 2015
By Clay Cerny

 

Why do Germans tend to carry more cash in their pockets than people in the U.S.? This sounds like a weird question, but I think it says a lot about workers’ rights. An article from USA Today (via the Chicago Sun-Times) reports that the average German saves more than Americans, and they use credit cards less. The average German carries $123 in cash compared to $74 for Americans. Where 53% of Americans have credit cards only 32% of Germans use them. The article cites history as the cause of this difference: “Germany’s cash obsession is deeply rooted in the scare from its economic crisis between World War I and II.” Later, it claims, “After losing WWII and suffering massive destruction, Germans believed frugality and hard work would help them recover.”

I do not dispute these claims. But I think there maybe another important reason that Germans can pay cash and keep more of it in their pockets: They are better paid and have more rights as employees. According to a 2011 study by the Bureau of Labor Statistics, German workers earned $47.38 dollars per hour compared to $35.33 for the average American worker. German Workers also receive more vacation time (six week on the average) and more of a safety net during times of high unemployment. While historical factors may affect how Germans think about cash, they also have more of it and a better sense of job security. I think Americans also believe in hard work and frugality, but too many of them aren’t making enough money. America needs a raise.