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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

#131

Post by crdoconnor »

JanSt wrote: post #50
crdoconnor wrote: post #35

Earlier quoted context omitted.

>The Hartz IV reforms that added flexibility for companies The Hartz reforms suppressed wages and made the average German poorer: https://ideas.repec.org/a/wej/wldecn/557.html Germany's industrial success was evident years before they went into effect. Hartz is like trickle down economics and a lower minimum wage: the wealthy have good reason to love it and the wealthy will make up spurious reasons why you should lov…

> All the Hartz reforms did was suppress wages and make the average German poorer. That's exactly what I'm saying. (edit: on the wages and poorer part; it's of course _NOT_ everything they did) > Germany's industrial success was evident years before they went into effect. > Hartz is like trickle down economics and a lower minimum wage: the wealthy have good reason to love it and the wealthy will make up spurious reas…

"Without those reforms Germany would be part of the European crisis. It was called "the sick man of Europe" not long ago, not without a reason."

It would have been fine. Germany was labeled the sick man of Europe in the late 90s. It wasn't Hartz that gave it an economic boost, it was joining the Eurozone.

Plenty of other countries have had similar reforms and not experienced any beneficial stimulus (although that doesn't stop European elites trying to ram a pseudo-Hartz down everybody's throats).

"They did mostly mass production by hand while german factories are mostly automated and people there do a lot of higher-value work that requires much more knowledge than the chinese kind of manufacturing."

This is simply an artefact of the Chinese being poorer while they first enacted this policy. They moved up the value chain and are now close to the top - they're building commercial airliners and designing and building phones every bit as good as an iPhone.

In spite of that this education system is still pretty poor and China has not engaged in any reforms similar to Hartz.

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

#132

Post by realityking »

pm90 wrote: post #19
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…

I wonder how/whether increasing the defense budget would help the German economy. Let me just say right away, that I am in no way advocating for increasing the supply of arms and ammunition in the world, which already seems to be at dangerous levels. However, if Germany invested as much in military R&D and a domestic arms industry, I wonder if that would boost the economy as it has done in the US. Also, the immigrati…

_Selling_ weapons to nations not threatening you is a great business. You get to do some R&D, you employ quite a few people (often including manufacturing) and the buyer can't use the thing you sell them to advance their economy.

_Buying_ more weapons than you need to defend yourself on the other hand is a terrible investment. If they just sit around and aren't used against someone (or at least the threat of you using them gets you something) is a colossal waste of money.

Considering the German society is overall very pacifist, I don't see how buying more weapons (if even they build them within Germany) gets them much of anything.

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

#133

Post by crdoconnor »

JanSt wrote: post #28
RobertoG wrote: post #14

Earlier quoted context omitted.

Not sure why you are down-voted. It's obvious that this is part of the trick and many economist have pointed it. It works the other way too, the currency of other countries in the Eurozone is above what it would be without Germany, and all that without a fiscal stabilizer between the countries, like it do happens in the United States between different states. It's a recipe for disaster if the goal is an united Europe…

He is right in some way, but he also misses that german workers had to take a lot of cuts in pay, benefits and working conditions. While french workers only have a 35 hours work week and greece workers get to enjoy a long pension, germans work till 67 (soon 69) getting a lower pension (as percentage of pay) and mostly work 40 hours (for full time workers. Statistics are heavily skewed by (mostly) female part time wor…

"He is right in some way, but he also misses that german workers had to take a lot of cuts in pay, benefits and working conditions. "

This didn't give Germany much of an economic stimulus although it did help to filter the wealth created by their export boom upward.

Hartz was good for profits though, which a lot of economists seem to confuse with being "good for growth".

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

#134

Post by lispm »

crdoconnor wrote: post #128
lispm wrote: post #75

Earlier quoted context omitted.

> Which part of "it wasn't just the Euro, reunification had the same effect" was I unclear about? West Germany was before the Euro and before the reunification economically strong. It was the world's largest exporter in 1986, 1987, 1988 and 1990. Around 1960 Germany was already second largest exporter in the world. Reunification was in October 1990.

As far as I was aware it happened in the early-mid 90s: http://savingusmanufacturing.com/blog/general/how-did-german... "Germany surpassed the United States to become the world’s leading exporter in 1992, around the time that Germany joined the European Union as a founding member."

As I said Germany was already the world's second largest exporter in 1960. Behind the US, which has 4 times the population.

Germany then became the largest exporter in 86, 87, 88, 90, 2003, 2004, 2005, 2006, 2007, 2008.

In 2016 Germany is the third largest exporter after China and the US. The account surplus (goods, services and investments) was the largest, next is China.

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

#135

Post by Pica_soO »

foepys wrote: post #118
Pica_soO wrote: post #63

Earlier quoted context omitted.

Okay, first things- first - no lessons where learned, nobody out of the good of their hearts did anything for anybody. The original plan after world war 2 was to turn Nazi Germany into a agrarian border stripe between the two emerging power blocks. This plan was put into action, and some starvation resulted from the dismantling and moving of the factories. The reason this changed is because the cold war tensions, mad…

You say that like every single German personally executed jews and other minorities. Yes, a lot of Germans did. Yes, more Germans went along and didn't do anything against the Nazis. But only a minority of Germans knew how bad it was. My grandmother told me that they knew about some labor camps were certain people were put. She said that she didn't know anything about the industrialized murder. If you look on the map…

There is a program called "Stolpersteine"- they have put little bronze-bricks into the streets before houses where Jews and others who where "Transported" lived. There are little bronze bricks in nearly every street of the town i live nearby. Yet many of the old people there claim to never have known. And many claim they have helped the prisoners in some way.

https://en.wikipedia.org/wiki/Stolperstein

The Wehrmacht shot and torched whole villages for partisan activity. And soldiers talk- they have convoys through the hinterland- they knew exactly what the SS was doing in the conquered territories. They guarded millions of war-prisoners while not giving them food and shelter until they succumbed.

Im not singling out germany. Every country, and all people on the planet are capable of this. WorldWar2 or the holocaust where not something particular unique. They where just humanity's worst behavior combined with organization skill and industrial capacity's. Stalins Holdomor, the Archipel Gulag or Maos Killing spree are similar in dimension but lacked the cultural scenes echo chamber for sentimental political reasons.

These messy large scale crimes where not ended by education, a protest generation or self civilization of the species, but by the invention of the nuclear bomb, which limited the war like activities of larger, well organized nations. Among non nuclear deterred groups or within country's, such breaks of civilization can happen anytime even today. (See Yugoslawia, Iraq/Syria, The Hutu/Tutsi Genocide)

I also assume some dictators started to turn away from ethnic scape-goating, after in several countrys riled up masses turned against them and China showed that even a crony-corrupt-dictatorship can be economically functional.

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

#136

Post by beagle3 »

ChefDenominator wrote: post #95
kspaans wrote: post #94

Earlier quoted context omitted.

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 bus…

Actually, a primary focus of a business owner must be on tax planning, because (assuming a successful business) it is going to be their largest expense by far.

Unfortunately, the way tax laws are applied usually makes it impossible to apply in retrospect - you have to build it into the business structure from before day 1; and often the non-monetary cost is prohibitive -- e.g., you can reduce your tax burden by 70% by moving to a different state / country.

As a successful business owner, tax is going to be one of your largest expenses. Makes sense to a major optimization target.

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

#137

Post by crdoconnor »

lispm wrote: post #134
crdoconnor wrote: post #128

Earlier quoted context omitted.

As far as I was aware it happened in the early-mid 90s: http://savingusmanufacturing.com/blog/general/how-did-german... "Germany surpassed the United States to become the world’s leading exporter in 1992, around the time that Germany joined the European Union as a founding member."

As I said Germany was already the world's second largest exporter in 1960. Behind the US, which has 4 times the population. Germany then became the largest exporter in 86, 87, 88, 90, 2003, 2004, 2005, 2006, 2007, 2008. In 2016 Germany is the third largest exporter after China and the US. The account surplus (goods, services and investments) was the largest, next is China.

Where is this data?

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

#138

Post by skookumchuck »

Roboprog wrote: post #126
skookumchuck wrote: post #99

Rarely mentioned is the fact that post-war Germany turned to free markets, hence the "German Miracle". This persisted until 1970 or so, when the German economy turned significantly towards socialism and big government.

It seems they did well both before and after 1970. So???

The growth rate flattened out after 1970.

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

#139

Post by someSven »

dejv wrote: post #100
samfisher83 wrote: post #92

Earlier quoted context omitted.

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 com…

I'm quite sure this isn't correct. You can always take extra courses and go to university. However, there is no point in everyone doing that.

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

#140

Post by lispm »

crdoconnor wrote: post #137
lispm wrote: post #134

Earlier quoted context omitted.

As I said Germany was already the world's second largest exporter in 1960. Behind the US, which has 4 times the population. Germany then became the largest exporter in 86, 87, 88, 90, 2003, 2004, 2005, 2006, 2007, 2008. In 2016 Germany is the third largest exporter after China and the US. The account surplus (goods, services and investments) was the largest, next is China.

Where is this data?

For example: https://de.wikipedia.org/wiki/Exportweltmeister

https://unstats.un.org/unsd/trade/imts/Historical%20data%201...

Percentage of world exports in 1960:

United States 16%

West Germany 9%

UK 7.8%

France 5.4%

https://www.wto.org/english/res_e/booksp_e/wtr13-2b_e.pdf

Percentage of world merchandize exports in 1980:

USA 11%

West Germany 9.5%

Japan 6.4%

China 0.9%

Thus the claim that Germany is a leading exporter because of Euro currency manipulation fails to explain why Germany was one of the leading exporters in the 60s, 70s, 80s, 90s, 2000s and 2010s. In all those years it was in the top three.

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