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Why Germany Still Has So Many Middle-Class Manufacturing Jobs

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Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#51

Post by mbid »

izacus wrote: post #26
buro9 wrote: post #11

Wow, that's a pretty appalling article. Seems to avoid even mentioning the desire of most of Europe to try and learn from what went wrong after the Great War. In 1918-1930 Germany was left so weakened by peace treaties that the seeds were sown for WW2. Post-WW2 the allies felt that a Germany crippled would only bring future wars, and a huge co-ordinated effort to build a sustainable industry and economic growth was p…

> (most of Germany's industrial capability had been destroyed or damaged) Tony Judt in Post War ( https://www.goodreads.com/book/show/29658.Postwar ) actually claims that this is patently false. That Germany actually came out of WW2 with most of its industry intact (it was away from the most bombed cities and majority of fighting actually happened in France/Poland/USSR) and was in significantly better shape than Frac…

An anecdote on this: After the second world war, 93% of Volkswagen's equipment was still usable (https://de.wikipedia.org/wiki/Volkswagen_AG#Nachkriegszeit).

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#52

Post by ChefDenominator »

crdoconnor wrote: post #9
polmuz wrote: post #8

> Tax advantages are another reason. The high taxes on assets in France and the inheritance tax in the U.S. prevent the accumulation of capital necessary for the formation of a strong mid-sized sector. Really? How?

This is basically the same theory as trickle down economics. I thought Harvard wouldn't be pushing that any more.

There is no actual theory of trickle down economics. This is a derogatory term used as a distraction from discussing real economics.

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#53

Post by Boothroid »

Perhaps this means Germany could suffer disproportionately as a result of automation. It's also worth pointing out that Germany is not immune to global trends that may erode the ability to sell based on quality - I recently bought a 2001 BMW E39, thought by many to be the best BMW ever made. In fixing up the E39 I've come across the same opinion over and over again: BMWs/German cars in general are not as well made as they used to be.

Edit: I'm not saying my E39 is thought to be the best BMW ever made of course :D

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#54

Post by Retric »

izacus wrote: post #26
buro9 wrote: post #11

Wow, that's a pretty appalling article. Seems to avoid even mentioning the desire of most of Europe to try and learn from what went wrong after the Great War. In 1918-1930 Germany was left so weakened by peace treaties that the seeds were sown for WW2. Post-WW2 the allies felt that a Germany crippled would only bring future wars, and a huge co-ordinated effort to build a sustainable industry and economic growth was p…

> (most of Germany's industrial capability had been destroyed or damaged) Tony Judt in Post War ( https://www.goodreads.com/book/show/29658.Postwar ) actually claims that this is patently false. That Germany actually came out of WW2 with most of its industry intact (it was away from the most bombed cities and majority of fighting actually happened in France/Poland/USSR) and was in significantly better shape than Frac…

It's simplified Germany took a few years, policy changes, and loans to really get back into shape. https://en.m.wikipedia.org/wiki/Wirtschaftswunder Longer term it benefited from both good longer term policies and positive cultural influences, and the Korean War.

But yea, Germany had more intact industry than often portrayed.

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#55

Post by marenkay »

JanSt wrote: post #36
IdontRememberIt wrote: post #23

I think the most important factor has been missed: planned luck. All the countries (in Europe) who are having success today are the ones who had a crisis (each for a different reason) in the '90s and made structural reforms. During the crisis in the 2000s and 2010s, these countries (Sweden, Switzerland, Germany, etc.) were leaner, more flexible than their "competitors". Fun fact, most of these countries are protestan…

You are right on the structural reform part, you should not be downvoted! There were massive changes in Germany (Hartz IV Reformen)

Though I wonder how these changes have actually had effects on these sectors, as this basically just produced a low payment workforce that these days benefits low paying unicorns like Uber, etc.

All that Germany basically did was to change social law so that a higher amount of people would end up within the lower range of the work force and make it harder to get out.

E.g. effectively these days losing your job for longer term means you have to liquidate all your assets as a German until you have nothing left before social service would help you.

Coming back to the article, as a German I actually do not remember any larger structural reforms that would have had beneficial effects on mid to high skilled workers. Looking at my own 25 years of working I would say... I notice an increase in costs for maintaining the high skill level and income completely being almost irrelevant because of devaluation of currency and almost no increases in the market in the past two decades.

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#56

Post by thesumofall »

IdontRememberIt wrote: post #23

I think the most important factor has been missed: planned luck. All the countries (in Europe) who are having success today are the ones who had a crisis (each for a different reason) in the '90s and made structural reforms. During the crisis in the 2000s and 2010s, these countries (Sweden, Switzerland, Germany, etc.) were leaner, more flexible than their "competitors". Fun fact, most of these countries are protestan…

Max Weber has you covered: https://en.m.wikipedia.org/wiki/The_Protestant_Ethic_and_the...

However, the German economic powerhouses are the Southern states - all of which are predominantly Catholic

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#57

Post by pluma »

olewhalehunter wrote: post #38
pluma wrote: post #31

Earlier quoted context omitted.

Not really. Historically (especially in the massive growth period after WW2 and before the reunification) the largest influx of immigrant workers came from countries like Italy and Turkey. A large number of seasonal workers these days come from Eastern Europe but that doesn't explain the decades prior.

Historically (since about the 1700s) didn't large numbers of Europeans from all over the continent go there for the conveniently located scientific community and trade crossroads?

Germany didn't really exist as a nation until 1815 so I'm not sure what you're arguing. Also the Eastern borders of Germany changed a lot until 1990.

Also the current economic situation of Eastern Europe has likely more to do with the failure of the Soviet Union than with whatever happened in the 1700s.

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#58

Post by ChefDenominator »

mbid wrote: post #37
polmuz wrote: post #8

> Tax advantages are another reason. The high taxes on assets in France and the inheritance tax in the U.S. prevent the accumulation of capital necessary for the formation of a strong mid-sized sector. Really? How?

I've heard the argument that, with high inheritance taxes, the heir of a family-owned company has to sell parts or all of the business in order to pay the tax. I don't know enough about the issue to say whether there is some truth to it.

The one direct exposure I have had to the issue of inheritance tax was with a small Midwest-based distributor. The owner was very old and wanted to pass the company to his daughters, who had actually been running the business for decades (and when I came along, his granddaughters were working the office).

His issue was that what the government decided his business to be worth could only be paid with more cash than his business generated in 5 years. This meant that his heirs would have to mortgage their shares to cover the inheritance tax, which places ownership into a different category of investment.

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#59

Post by MrFoof »

buro9 wrote: post #11

Wow, that's a pretty appalling article. Seems to avoid even mentioning the desire of most of Europe to try and learn from what went wrong after the Great War. In 1918-1930 Germany was left so weakened by peace treaties that the seeds were sown for WW2. Post-WW2 the allies felt that a Germany crippled would only bring future wars, and a huge co-ordinated effort to build a sustainable industry and economic growth was p…

>The reason so many of the mid-sized market leaders come from Germany can be traced back to post-WW2 policies to ensure that Europe could be at peace. Some of these policies were undoubtedly exploitative in the short term, but long term have achieved their goal.

Hilariously, the Volkswagen designs (The Type 1/Beetle), factories, etc. were actually offered as a free war reparation to both the US and to Britain. However, neither party was interested... in what would end up being the most profitable automotive concern on the planet. It is considered the single greatest blunder of the entire automotive industry.

James May makes a mention of it in his Cars of the People series: https://youtu.be/6pmp0Oxg520?t=11m54s

Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs

#60

Post by marenkay »

Boothroid wrote: post #53

Perhaps this means Germany could suffer disproportionately as a result of automation. It's also worth pointing out that Germany is not immune to global trends that may erode the ability to sell based on quality - I recently bought a 2001 BMW E39, thought by many to be the best BMW ever made. In fixing up the E39 I've come across the same opinion over and over again: BMWs/German cars in general are not as well made as…

If anything Germany will suffer from the consequences of not investing in education for the past four decades as we are already seeing the lack of capable, well-trained, high skilled workers.

German education basically has been focussed on producing low level work forces and ignoring the rest, you can see that clearly while hiring.

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