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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

#91

Post by mtgx »

eeZah7Ux wrote: post #71
mtgx wrote: post #47

Earlier quoted context omitted.

I don't think it's as much the fact that the US invested in the military sector as it is the fact that the US invested in something. What I mean by that is that yes, the US likely benefited from investing trillions of dollars in the military. But it could've also benefited, perhaps even more so, if it had invested trillions of dollars in infrastructure. This would have made it easier and cheaper for businesses to shi…

> investing trillions of dollars in the military These are sometimes covert handouts though inflated costs. > But it could've also benefited, perhaps even more so, if it had invested trillions of dollars in infrastructure ...still, military power and influence plays a big part part in international negotiation.

I'm not saying the US shouldn't invest at all in maintaining its superior military status. I'm mainly saying that a lot of the money is being wasted (like say for buying more tanks, or just to keep certain military jobs, in the same way it's trying to keep coal jobs), and it could've been invested elsewhere with at least as many results (for the economy).

I would also say that a lot of the military budget is being wasted on unnecessary wars, so that money doesn't really go into "strengthening US military" either. It's being thrown away in the Middle East.

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

#92

Post by samfisher83 »

dejv wrote: post #73
samfisher83 wrote: post #67

I think this is a big contributor: A further pillar of the Hidden Champions’ competitive strength is the unique German dual system of apprenticeship, which combines practical and theoretical training in non-academic trades. The Hidden Champions invest 50% more in vocational training than the average German company. I think a 4 year college degree does not make sense for a lot of jobs. It just puts students with more…

We have similar educational system here in Czech Republic. There are numerous pros and cons. Basically at the age of 15 you have to choose what you want to do with your life as changing careers are not that simple. And lets be honest, most of 15 years old kids have no idea what they want to spend rest of their life doing. I did take this technical route (focusing on electronics, computer networking and programming) a…

In america you are required to take english, math, physics, chemistry etc. in high school. I am just talking about the post high school years.

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

#93

Post by samfisher83 »

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.

If they sell it other investors are buying it so I don't get this argument.

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

#94

Post by kspaans »

ChefDenominator wrote: post #58
mbid wrote: post #37

Earlier quoted context omitted.

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 hi…

That sounds like a failure of tax & estate planning. If you wait until you are very old to give away your assets you are putting yourself in the pay-the-most-inheritance-tax position. If the daughters had been running the business for decades already, they would have had lots of time to shift the ownership. This isn't an argument against inheritance tax, it's an argument for better education about personal finances.

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

#95

Post by ChefDenominator »

kspaans wrote: post #94
ChefDenominator wrote: post #58

Earlier quoted context omitted.

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 hi…

That sounds like a failure of tax & estate planning. If you wait until you are very old to give away your assets you are putting yourself in the pay-the-most-inheritance-tax position. If the daughters had been running the business for decades already, they would have had lots of time to shift the ownership. This isn't an argument against inheritance tax, it's an argument for better education about personal finances.

Yes, the primary focus of a business owner must be on tax planning, because this generates efficient operations, undoubtedly.

Also, laws change all of the time. My impression, every time I dig down with real people, IRL, is they have the same general opinion as you and others like you here, but have no actual exposure to the actual laws, as they implemented. The only occasion I come across this and I see that the business owner, with a small team tax attorneys and CPAs, can't seem to spend enough money to escape huge taxes.

I can only assume that the business owner is clueless and the Internet anons are the experts he should have hired.

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

#96

Post by qznc »

bluedino wrote: post #33
qznc wrote: post #7

Earlier quoted context omitted.

A significant part of the Mittelklasse is certainly part of the car industry. Maybe BMW, Audi, etc are not that keen on acquiring?

In the US, the big three automakers generally don't acquire small companies. A lot of work in the industry is done by companies like Delphi (who also have sites in Germany)

Is the car industry a significant factor? How does Detroit compare to Germany?

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

#97

Post by ricw »

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…

This is just incorrectly attributing germanys success to the Marshall plan! Yes, the Marshall plan helped Germany recover. But the Marshall plan had absolutely nothing to do with the "Mittelstand" emerging as a predominant industry type. There is nothing in the Marshall plan that enabled this to happen.

More than anything, this has to do with German ability to unite goals of labour and market capitalism, commonly referred to as social capitalism in Germany. It majorly aligns labour and company ownerships goals. Labour wants to have reliable jobs, which you achieve by being highly skilled and thereby competitive. Owners want to be competitive and can do this via highly skilled labour. Labour representatives are by law required to be on a companies board. This is what forces labour and owners to work together. It has lead to a highly skilled and competitive workforce that enables the Mittelstand. There are other factors that help, but none of them are as important.

This has nothing as such to do with the Marshall plan. It's very ignorant to attribute this success to "americas help". it's borderline offensive and does not actually engage with the primary argument in the article. If you want to learn from germanys success, you should read up on labour represantatives being on the company board, rather than attributing it to something that is barely related.

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

#98

Post by lispm »

tiatia wrote: post #80
lispm wrote: post #77

Earlier quoted context omitted.

Germany was already the world's second largest exporter in 1960. With the DM.

There is nothing bad in being a large or the largest exporter. Germany exported a lot and imported a lot. But recently this had led to the absurd situation, that Germany exports both, goods AND capital: https://www.querschuesse.de/wp-content/uploads/2013/11/1a18.... This is not sustainable.

> Germany exported a lot and imported a lot.

Germany exports more than it imports, at least since the 60s.

> But recently this had led to the absurd situation, that Germany exports both, goods AND capital

Not recently. Happened already in the 70s and 80s. The decade after reunification was unusual. Starting with 2001 Germany was back exporting capital.

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

#100

Post by dejv »

samfisher83 wrote: post #92
dejv wrote: post #73

Earlier quoted context omitted.

We have similar educational system here in Czech Republic. There are numerous pros and cons. Basically at the age of 15 you have to choose what you want to do with your life as changing careers are not that simple. And lets be honest, most of 15 years old kids have no idea what they want to spend rest of their life doing. I did take this technical route (focusing on electronics, computer networking and programming) a…

In america you are required to take english, math, physics, chemistry etc. in high school. I am just talking about the post high school years.

Well, it is different system here and in Germany. Vocational study or technical high school is limiting your choices of uni and career paths.

Post high school you either go work (you already spent few years on the job during school) or uni.

There are tons of jobs that are closed to you when you choose wrong path at the age of 14 or 15 and it is really hard to change the tracks.

It is good system for manufacturing companies and economy, but not that great for some people.

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