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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

#61

Post by jbigelow76 »

easilyBored wrote: post #42
educar wrote: post #35

Earlier quoted context omitted.

I have a similar anecdote except the German in my story fixed the tap himself! I was squarely impressed with the skills an average German has.

A lot of things are common sense. OK, "this part must go here because it looks like it does X." We just need a little motivation. Granted, doesn't mean you should rewire your house using YouTube videos

Watch enough YouTube videos and I hear you can build a whole house.

http://www.cnn.com/2017/01/13/us/mother-house-youtube-build-...

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

#62

Post by legulere »

lacampbell wrote: post #41
lima wrote: post #2

The apprenticeships are particularly important. Many brilliant friends of mine who failed university or even high school did an apprenticeship instead. Among them are CEOs, R&D managers and founders.

I've often idly wondered if you could do Software Development as an apprenticeship. Use industry tools in your work day, and theoretical computer science at night schools/block courses.

You can in Germany. It's called Fachinformatiker für Anwendungsentwicklung.

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

#63

Post by claudius »

everybodyknows wrote: post #45
KKKKkkkk1 wrote: post #21

The article asks why there are so many successful mid-size companies in Germany, and it lists reasons such as continuity of leadership, scientific competencies, system of apprenticeships and others. I don't see how this answers the question in the title. How does the school of mathematics of the University of Goettingen help make German factory workers competitive with Chinese ones? Why aren't these companies moving…

Wage suppression. Seen most obviously by simple comparison to other Eurozone states: http://fortune.com/2014/10/22/why-germany-is-the-eurozones-b... This is not something Germans -- such as apparently the author of OP -- like to talk about.

The main point of the article appears to be that peripheral EU countries did not benefit as much from the internal open market as Germany due to weak ‘civil service’ and oligarchic structures which predated the EU and caused a misappropriation of EU funds intended to improve competitiveness. It then somehow seems to conclude that this was all Germany’s fault instead of being the fault of the people in those peripheral countries with ‘economic implosion, rising inequality and widespread corruption’.

The article does mention wage suppression in the beginning but does not give a good argument why the wage suppression as observed in Germany since the early 2000's is a bad thing -- if wages are inflated and you need to compete with China for manufacturing, then you can either scrap your manufacturing or suppress wages, there’s not that much of an alternative there.

My sibling comment arguing that the largest low-wage sector in the EU is somehow inherently bad is also misguided: if the alternative is much higher unemployment, low-wage jobs are still preferable to no jobs, especially if they come with the usual social security mechanism, as is increasingly the case again.

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

#64

Post by tim333 »

stephen_g wrote: post #58
apo wrote: post #8

I was surprised the article didn't mention the euro, specifically how Germany gets to denominate its goods in a cheap currency that doesn't fully reflect its strong fiscal policies.

This is a huge thing - Germany couldn't run its huge trade surplus without its currency appreciating and reducing its competitiveness otherwise. It's a pretty bad deal for the consumption-based Eurozone economies though - they have to internally devalue instead of just being able to devalue their exchange rate. It's one of the major problems with the Euro... It was a terrible idea from the start, and situations like…

Dunno. German manufacturing success predates the Euro. The Swiss with a similar culture but an appreciating currency still run surpluses exporting stuff they make. https://www.tradingeconomics.com/articles/02212017075915.htm

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

#65

Post by pgeorgi »

therealdrag0 wrote: post #55
mcthorogood wrote: post #10

The HBR article cites the high inheritance tax in the U.S. as reason for the low number of middle class jobs. But, to the contrary, today the inheritance tax in the U.S. is lower than in Germany.

I didn't really understand that point? Is the claim that if there was no inheritance tax, a family would accumulate enough money to start a mid-sized business? Or is the ownership of a business taxed upon death?

An inheritance can include a company, if privately held. That company has a value, and that's taxed through inheritance tax.

The problem is that a company of value $x rarely has liquid assets of $x*$taxrate, so inheriting a company can mean personal ruin.

On the _other_ hand, not accounting for companies in inheritance tax means that every family ever will shift all its possessions into a company.

Roughly speaking, Germany solved this by creating a set of exceptions for value "in a company", as long as it continues to be held for a given number of years (otherwise, since it was sold, it's considered a liquid asset and thus fully taxable).

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

#66

Post by laughingman2 »

lacampbell wrote: post #41
lima wrote: post #2

The apprenticeships are particularly important. Many brilliant friends of mine who failed university or even high school did an apprenticeship instead. Among them are CEOs, R&D managers and founders.

I've often idly wondered if you could do Software Development as an apprenticeship. Use industry tools in your work day, and theoretical computer science at night schools/block courses.

Its being done in Zoho corp. A product based company in India.

They pay students from economically weaker segments who don't/can't attend college and teach them software development basics some time.

And these students are put in production teams to learn from apprenticeship.

http://www.livemint.com/Companies/LU4qIlz47C5Uph2P5i250K/Cha...

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

#67

Post by laughingman2 »

easilyBored wrote: post #38
CPLX wrote: post #18

Earlier quoted context omitted.

You don't have to hedge, that comment about inheritance tax is literally ridiculous and completely unsupported. The idea that the US has a problem with too little accumulation of intergenerational wealth is patent nonsense.

The idea that the US has a problem with too little accumulation of intergenerational wealth is patent nonsense. This is different from parent leaving you stock and bonds. Father dies, leaves company that makes engines to son and $50 million in cash because he has invested most in his company. IRS+State: son, you owe us half+ of what your father left you, or $1.1 Billion. If he borrows half of company's worth that's n…

> I'd look to lower the inheritance to children to say 10% and abolish trusts that fund generations of lazy, spoiled brats living from their great-great-grandfather's money.

Exactly, these leeches have to be stopped.

And the money could be instead put to some good common like free college, health care leveling the playing field for everyone.

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

#68

Post by pcrh »

mcthorogood wrote: post #10

The HBR article cites the high inheritance tax in the U.S. as reason for the low number of middle class jobs. But, to the contrary, today the inheritance tax in the U.S. is lower than in Germany.

Indeed, that doesn't seem to be a very plausible contribution to the success of the Mittelstand. In the US, inheritances large enough to capitalize a mid-sized company are usually protected from inheritance taxes through a number of "tax-efficient structures".

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

#69

Post by a_bonobo »

sverige wrote: post #52
mtempm wrote: post #43

Earlier quoted context omitted.

This is so German actually. I've been living in Australia the past year (which has a lot of Germans) and twice I helped someone change a flat tyre. Both times a German also came to assist, and both times it was an American who didnt know how to change a flat (there arent that many of them in Aus).

As an American with some German ancestry, I find this to be very embarrassing. (The Swedes in my family can all change a tire as well, including my sister, but the German side is embarrassed.) Americans have become complacent and lazy, with no sense of "know how" or "make do." Hell, kids don't even know how to clean and cook a rabbit, let alone how to catch one with a snare. If the zombie apocalypse ever happened for…

I assure you 99.99999% of Germans don't know how to clean and cook a rabbit.

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

#70

Post by dmoo »

rtx wrote: post #17
lightedman wrote: post #5

Because German engineering is world-renowned. This much has been known for a good long while. You can take a German bearing of 'low quality' vs. a Chinese bearing of 'high quality' and easily tell that the German bearing is far superior. It only makes sense such engineering capability would result in a lot of manufacturing work in the middle-class range.

On the other hand German cars have one of the worst reliability scores year after year.

Data from the UK seems to suggest it's not as clear as that. Depends on the make, even cats from the same group VAG vary heavily. Skoda and VW seem good and Audi poor.

http://www.jdpower.com/press-releases/2015-uk-vehicle-depend...

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