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
#2[deleted]
Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs
#3I'd be interested in knowing what percentage of the Hidden Champions are publicly traded companies. Companies of that size are very likely to be acquired in the US. Consolidation is a constant activity by many public firms and probably (I am speculating) tends to reduce the proportion of mid-tier companies relative to Germany.
Once acquired, these companies have an additional set of factors weighing on them in that the founding team is likely to leave, budgets are controlled by, and, profits are sent to an external firm. Those three factors will reduce the company's ability to determine it's own fate.
Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs
#4[deleted]
Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs
#5I'd be interested in knowing what percentage of the Hidden Champions are publicly traded companies. Companies of that size are very likely to be acquired in the US. Consolidation is a constant activity by many public firms and probably (I am speculating) tends to reduce the proportion of mid-tier companies relative to Germany. Once acquired, these companies have an additional set of factors weighing on them in that t…
Nearly none - most are family-owned.
Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs
#6He missed the main reason: currency suppression.
Germany has managed to suppress the value of its currency over the years to make its exports artificially cheap, which encouraged growth, creating manufacturing jobs.
It did this firstly through reunification (dragging down the value of the DM) and subsequently by joining the Euro (Southern Europe had the value of their currencies pegged higher than their 'natural' value, Germany's was pegged lower).
Germany's export boom after joining the Euro would have been short lived if they reverted back to the DM as the value of their currency would have risen in value, pushing up the cost of exports, ending the boom. Instead it continued unabated.
China also achieved the same thing largely by buying foreign debt (mostly US treasuries). As did Singapore, Taiwan, Hong Kong and Japan, all of which achieved similar results. There's no magic sauce, it's just a question of whether industry takes political precedence over banking (which likes an overvalued currency).
Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs
#7I'd be interested in knowing what percentage of the Hidden Champions are publicly traded companies. Companies of that size are very likely to be acquired in the US. Consolidation is a constant activity by many public firms and probably (I am speculating) tends to reduce the proportion of mid-tier companies relative to Germany. Once acquired, these companies have an additional set of factors weighing on them in that t…
A significant part of the Mittelklasse is certainly part of the car industry. Maybe BMW, Audi, etc are not that keen on acquiring?
Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs
#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?
Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs
#9> 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.
Re: Why Germany Still Has So Many Middle-Class Manufacturing Jobs
#10> 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?
Yeah this sounds like a bunch of baloney. Inheritance continues to be the most likely way for people to get rich in both the US and France, and the tax is nowhere near the amount that would cause a serious dent in the assets being inherited.