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Switzerland is the world’s most competitive economy

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Re: Switzerland is the world’s most competitive economy

#111

Post by ohthehugemanate »

HSO wrote: post #2

It better be, given the cost of living and the salaries here… :-) On a more serious note, although I have no idea how this report was produced, one might note that it was produced by the WEF (a business-friendly Swiss organisation) and that it may well be part of the ongoing political debate in Switzerland on how to implement the referendum result on restricting immigration. I'm not saying it's right, wrong, objectiv…

The cost of living should be considered along with their income tax rate. It varies from canton (province) to canton, but hovers around 10%.

That's a great deal compared to most any other European country. In neighboring Germany for instance, if you earn €55k, your tax rate is about 44% (including solidarity surcharge). In Zurich it's about 11% (canton plus federal tax). The top rates are 47% and 16%, respectively.

So it's not much surprise that people want to live there, despite the high cost of living.

Re: Switzerland is the world’s most competitive economy

#112

Post by wycx »

tn13 wrote: post #62

I will not be surprised. Switz is also easily among the top 10 most economically free countries in the world. Economic freedom, competitiveness and foreign direct investments are so well correlated with economic freedom. Australia's ranking seems extremely puzzling though. The general perception is that it is very very competitive economy.

It is not that puzzling if you live in Australia and pay attention to the economy.

We have a residential real estate bubble that is worse than that of the US in 2006. Median house price to median income ratios in Sydney are worse than almost anywhere but Hong Kong. We have the highest per capita private mortgage debt of any country. This represents a massive unproductive overhead on the Australian economy, as the elevated cost of shelter flows into all other costs. Tax arrangements in Australia make leveraged real estate speculation more favourable than any other kind of investment, especially productive investment with any sort of risk attached. More than 50% of the existing mortgage debt is owed overseas via the big 4 Australian banks, so we are constantly exporting what wealth we have overseas as interest, so we can sell shitty houses built in the 1960s to each other for AUD1.2 million.

Many sectors of the Australian economy are filled by a limited number of participants (e.g. banking, supermarkets, hardware, telecommunications, petrol) who are most interested in rent seeking, and not interested in competing with each other.

The Australian economy has been a net importer of capital every year since the early 1970s, an almost ever year since post WW2. If you run a current account deficit so egregiously, the result is you sell off all your productive assets to stay solvent. This also means the pool of Australian capital available to invest in Australia itself is very limited. Australia has some of the highest immigration intake in the developed world, but no long term infrastructure planning to account for such population growth. Since most immigration increases the population of the large cities, the lack of investment in transport infrastructure is most apparent. We grow the economy by increasing the captias. Per capital net disposable income has been static or falling for the last 5 years.

Politically, Australia has been without vision for real economic development outside rewarding entrenched rent seekers for the last 20 years. We have not seen any significant increases in productivity over that period.

Re: Switzerland is the world’s most competitive economy

#113

Post by gragas »

heydenberk wrote: post #57
noobermin wrote: post #5

I always feel like it is unfair how we place different European nations in same category as the US in these rankings or whatever, and for the US, we average over all the states in the US. As homogenous the US is, different states have different economies, different laws, in some cases, some slight but important cultural differences. Is it really fair to say have the US compete on terms of "competitiveness" or in othe…

I was making this point a few weeks ago and after looking into it more, I still think it's a valuable point to raise, but the truth is more nuanced than I expected. States in the US vary in nominal GSP per capita by only 2x — from Mississippi at $35K to Delaware at $70K. In the EU, it ranges from Bulgaria at €6K to Ireland at €55K. (This excludes DC and Luxembourg, which are outliers in many ways.) In fact, even Miss…

>Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi.

It seems to me that there are many people who say things like that about most of the less-populated states.

To be honest, I'm glad. After moving to SF from a small Midwestern city, I've realized that I couldn't be paid to live here. Even if we don't mention the extremely high cost of living in San Francisco, if we just consider the negative externalities:

- Garbage everywhere

- Constant noise

- Unbelievable homeless problem

- High crime rates

- Extreme clash of culture (I see anti-tech graffiti on my way to work every day; I regularly overhear pretentious "how could you not be in tech?" conversations)

- Infinite suburbia

- High rates of mental illness (not that mental illness is a bad thing, but I think it is at least somewhat telling about the environment)

I'd still rather live back home in the Midwest, even if we didn't talk about explicitly quantifiable costs of living. There is an entire America out there between the coasts that has absolutely none of the things I just listed.

Re: Switzerland is the world’s most competitive economy

#115

Post by [deleted] »

heydenberk wrote: post #57
noobermin wrote: post #5

I always feel like it is unfair how we place different European nations in same category as the US in these rankings or whatever, and for the US, we average over all the states in the US. As homogenous the US is, different states have different economies, different laws, in some cases, some slight but important cultural differences. Is it really fair to say have the US compete on terms of "competitiveness" or in othe…

I was making this point a few weeks ago and after looking into it more, I still think it's a valuable point to raise, but the truth is more nuanced than I expected. States in the US vary in nominal GSP per capita by only 2x — from Mississippi at $35K to Delaware at $70K. In the EU, it ranges from Bulgaria at €6K to Ireland at €55K. (This excludes DC and Luxembourg, which are outliers in many ways.) In fact, even Miss…

[deleted]

Re: Switzerland is the world’s most competitive economy

#116

Post by xal »

bpodgursky wrote: post #96
clock_tower wrote: post #87

Earlier quoted context omitted.

> Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi. Remember good GDP versus bad GDP; a traffic jam increases GDP, but isn't anything particularly worth buying. Accumulated capital (like Notre Dame and the Louvre) doesn't show up in GDP either, an…

> a traffic jam increases GDP What? No, it doesn't, in any possible measure. Those are lost hours of productivity.

The driving hours usually come out of the participants free time instead of out of the work force. The traffic jam will increase gasoline consumption.

You are right though, it isn't a good example. Here is a better one: Someone getting cancer increases GDP significantly due to health care costs.

Re: Switzerland is the world’s most competitive economy

#117

Post by eternalban »

hobo_mark wrote: post #97
uola wrote: post #82

Earlier quoted context omitted.

While I can't find a source at the moment, the story I heard is that some early Google hire had ties to ETH. It's also that Google is in many ways not structure like an engineering company. Being closely connected to a school fits their management methodology quite well. > I think in the grand scheme of things, Zurich/Switzerland has a lot to offer. Actually no and this is the problem. If you can either stand being a…

You probably mean Urs Hölzle: https://en.wikipedia.org/wiki/Urs_H%C3%B6lzle ps: expats usually remain expats almost everywhere (as they tend to stick together), what's so inflexible about .ch in particular?

> what's so inflexible about .ch in particular?

Well, I remember when arriving for work in Geneva a few years ago, a French colleague informed me (quite seriously :) that one can not urinate in the street. The American colleague mentioned "oh, and quiet hours after 10 pm". And you are not supposed to hunt the swans swimming in the lake. (& My youngish Swiss friends all complain about how "boring" it is.)

I think Switzerland is one of those love it or hate it things. I loved it.

Re: Switzerland is the world’s most competitive economy

#118

Post by stepanhruda »

clock_tower wrote: post #87
heydenberk wrote: post #57

Earlier quoted context omitted.

I was making this point a few weeks ago and after looking into it more, I still think it's a valuable point to raise, but the truth is more nuanced than I expected. States in the US vary in nominal GSP per capita by only 2x — from Mississippi at $35K to Delaware at $70K. In the EU, it ranges from Bulgaria at €6K to Ireland at €55K. (This excludes DC and Luxembourg, which are outliers in many ways.) In fact, even Miss…

> Mississippi's GDP per capita being similar to that of France, Italy or Spain is really hard to reconcile with the fact that many of us would love to live in the latter countries and couldn't be paid to move to Mississippi. Remember good GDP versus bad GDP; a traffic jam increases GDP, but isn't anything particularly worth buying. Accumulated capital (like Notre Dame and the Louvre) doesn't show up in GDP either, an…

Oh man you're mixing up so many concepts. GDP is product - what value you produce during the year. Nothing is produced during a traffic jam. If you want to see accumulated wealth and climate taken into account, compare quality of life.

Re: Switzerland is the world’s most competitive economy

#119

Post by ekianjo »

ohthehugemanate wrote: post #111
HSO wrote: post #2

It better be, given the cost of living and the salaries here… :-) On a more serious note, although I have no idea how this report was produced, one might note that it was produced by the WEF (a business-friendly Swiss organisation) and that it may well be part of the ongoing political debate in Switzerland on how to implement the referendum result on restricting immigration. I'm not saying it's right, wrong, objectiv…

The cost of living should be considered along with their income tax rate. It varies from canton (province) to canton, but hovers around 10%. That's a great deal compared to most any other European country. In neighboring Germany for instance, if you earn €55k, your tax rate is about 44% (including solidarity surcharge). In Zurich it's about 11% (canton plus federal tax). The top rates are 47% and 16%, respectively. S…

In Belgium about half of your salary goes to taxes.

Re: Switzerland is the world’s most competitive economy

#120

Post by [deleted] »

erispoe wrote: post #66
ucaetano wrote: post #27

Earlier quoted context omitted.

Taxes and payroll taxes are much lower in Switzerland than in France, for example, so an employee might cost the same to the company in both countries, but have much more net income in Switzerland. Most people don't see payroll taxes, only income taxes. Having a large percentage of foreigners and English-speakers also contributes to that, as well as the clustering effect (IBM Research has a lab in Zurich since 1956).

The median income in Switzerland is PPP$35,083 and PPP$24,233 in France. The main difference is in healthcare, which in Switzerland is entirely private, post-payroll, and can easily amount to $500/month, whereas in France it's part public (payroll) part private. And the private part is usually paid on payroll too. Health insurance is mandatory in Switzerland, so it really is not disposable income, even if you have pr…

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