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Germany sees company bankruptcies soar

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Re: Germany sees company bankruptcies soar

#61

Post by _ph_ »

wolframhempel wrote: post #46

As a German who lived abroad a long time, but moved to Berlin eight years ago, here’s my (completely personal) assessment of why Germany is going down the drain economically - and will continue to do so: 1) Mindset and Culture. The idea of entrepreneurship, hard work and reward for risk is becoming completely alien to Germans. New technologies and high growth sectors are almost exclusively perceived in terms of their…

No, the government isn't "on a largely ideologically driven understanding of climate change prevention". The shutdown of the nuclear reactors was decided by the previous government in 2011 and never reconsidered. Yes, as part of the war against Ukraine, Russia cut their gas deliveries to Germany. We managed to find other suppliers, but at least short term, sport market priced for gas went high up. This has by now settled down to about pre-war prices. In parallel, the ramp up of renewables was accelerated. In Q1 2024, 60% of the electricity was renewable.

Re: Germany sees company bankruptcies soar

#62

Post by snowpid »

portaouflop wrote: post #45
dailykoder wrote: post #20

Earlier quoted context omitted.

because of the 'panic pessimistic breaking news everywhere', I guess. Somehow people want to believe that it's all really THAT bad and not that we are managing those hard times quite okay-ish

If you only knew how bad things really are

so how bad things in Germany really are?

Re: Germany sees company bankruptcies soar

#63

Post by hobofan »

wolframhempel wrote: post #46

As a German who lived abroad a long time, but moved to Berlin eight years ago, here’s my (completely personal) assessment of why Germany is going down the drain economically - and will continue to do so: 1) Mindset and Culture. The idea of entrepreneurship, hard work and reward for risk is becoming completely alien to Germans. New technologies and high growth sectors are almost exclusively perceived in terms of their…

Essentially all your points have "always" been true for Germany, so trying to paint them as causes for Germany's economy "going down the drain" (also a very much debatable assessment) is very reductive.

The points you are making sound a lot more like what you would find as political campaigning talking points for deregulation than what's actually transpiring with the German economy.

To 1): Entrepreneurship has always been a lot lower in Germany as in many other countries, as it's not seen as e.g. a capitalist virtue as in the US. The German economic model with it's widespread Mittelstand works well with few entrepeneurs and a large portion of the population working in those enterprises. Not everyone has to be a small entrepeneur and hustle all the time.

To 2): Again, basically the same as it has always been. For the typical company there isn't any more "government interference in the most minute details of running a business" than 20-30 years ago. One also has to keep in mind that (as in most countries) that as long as you are making money and act in good faith according to the spirit of the law, the regulatory bodies are a lot more bendy than one might assume according to the letter of the law.

To 5): You can very much scale your workforce up and down. Limited time contracts and long trial periods are very common. On a larger scale that is typically done via subcontractor structures. Also the typical reasons for wanting to scale down (economic non-viability) are permissible reasons for letting people go. It's also very much possible to fire people for under-performance (you just have to go through the motions of tracking their performance and comparing it to peers or documenting their non-compliance). The only stories I'm actually still hearing in the wild of people not being able to be fired is about "Beamte" (public servants).

Re: Germany sees company bankruptcies soar

#64

Post by selfmodruntime »

constantcrying wrote: post #51
selfmodruntime wrote: post #48

Earlier quoted context omitted.

I want to add to point 3) German's pay a lot of taxes. Living costs and rent are sky high in cities. In the past, I reduced my hours to 28 hours a week because the difference was negligible in taxes paid. I even got money from the government to pay rent because my wage was lower. There is a real problem where between salary band's, the money after taxes does not change significantly even if you're paid more. Working…

The problem really is the progressive tax system, which directly promotes low productivity, since working more usually means lower and lower wages. I met many engineers who would be completely willing to work more hours, but it makes very little sense as you are working the additional hours for far lower wages. The idea of banning lower work times is new to me, but seems in line with the German government approach to…

Here are my sources: [1] Robert Habeck, our Minister for economic affairs say's we can not afford less work. [2] Saxony's Minister arguing for "40 hours workweeks for all" and say's that "part time is a mistake". [4] is Markus Söder, Bavaria's Minister telling his plans to force Teachers to work more [5].

This is a manifold problem. Low post-tax wages (except for some government workers), high stress due to few colleagues and tons of work, extremely late age of entry for pensions.

[1]: https://www.businessinsider.de/wirtschaft/faktencheck-robert...

[2]: https://www.tagesspiegel.de/politik/recht-auf-teilzeit-als-f...

[3]: https://www.fr.de/politik/cdu-michael-kretschmer-sachsen-rec...

[5]: https://www.sueddeutsche.de/bayern/bayern-lehrer-soeder-teil...

Re: Germany sees company bankruptcies soar

#65

Post by petre »

surfingdino wrote: post #30
TMWNN wrote: post #19

I've heard that the Ukraine War, and consequent loss of Russian gas, was devastating for German chemical and manufacturing because of the increase in cost of not just energy but also feedstock.

They also lost Russia as a market to sell to. Ostpolitik bit them in the ass, because they did not diversify their energy supplies.

Germans keep complaining about the loss of Russian gas and refuse to see the war as an opportunity to scale up their military industrial complex, arm themselves to the teeth, sell weapons to Eastern and Southern Europe. Poland and Romania are buying tanks and howitzers from the US and South Korea, the French have their own industry.

Re: Germany sees company bankruptcies soar

#66

Post by hobofan »

constantcrying wrote: post #51
selfmodruntime wrote: post #48

Earlier quoted context omitted.

I want to add to point 3) German's pay a lot of taxes. Living costs and rent are sky high in cities. In the past, I reduced my hours to 28 hours a week because the difference was negligible in taxes paid. I even got money from the government to pay rent because my wage was lower. There is a real problem where between salary band's, the money after taxes does not change significantly even if you're paid more. Working…

The problem really is the progressive tax system, which directly promotes low productivity, since working more usually means lower and lower wages. I met many engineers who would be completely willing to work more hours, but it makes very little sense as you are working the additional hours for far lower wages. The idea of banning lower work times is new to me, but seems in line with the German government approach to…

> I met many engineers who would be completely willing to work more hours, but it makes very little sense as you are working the additional hours for far lower wages.

"Far" lower wages? Progressive income tax is constant at 42% for essentially the whole salary range that is relevant for an engineer (66-278k).

As a concrete example, total tax burden at:

- 70k is ~40% (42k net)

- 100k with ~44% (56k net)

- 200k with ~46% (107k net)

I'd seriously question the judgement of any engineer that chooses e.g. the part time job that gives you 42k net over the full time job that gives you 56k net (= significant difference of possible living conditions/disposable income) _purely_ on the basis that you earn "far" less per additional Euro. (I think it would be very understandable to choose the less work hours just for having more free time to spend on other things.)

I feel like there is almost an inverse effect once you hit the limit on social contributions (~90k), where it becomes more motivating to earn more, as from that point "only" your income tax increases and health insurance etc. stays steady.

Re: Germany sees company bankruptcies soar

#67

Post by constantcrying »

hobofan wrote: post #66
constantcrying wrote: post #51

Earlier quoted context omitted.

The problem really is the progressive tax system, which directly promotes low productivity, since working more usually means lower and lower wages. I met many engineers who would be completely willing to work more hours, but it makes very little sense as you are working the additional hours for far lower wages. The idea of banning lower work times is new to me, but seems in line with the German government approach to…

> I met many engineers who would be completely willing to work more hours, but it makes very little sense as you are working the additional hours for far lower wages. "Far" lower wages? Progressive income tax is constant at 42% for essentially the whole salary range that is relevant for an engineer (66-278k). As a concrete example, total tax burden at: - 70k is ~40% (42k net) - 100k with ~44% (56k net) - 200k with ~4…

>I'd seriously question the judgement of any engineer that chooses e.g. the part time job that gives you 42k net over the full time job that gives you 56k net (= significant difference of possible living conditions/disposable income) _purely_ on the basis that you earn "far" less per additional Euro.

Of course not just because of that. They look at the money they earn, the money they need to live and see that if they reduce their expenses a bit, they can easily do with less hours. The 66k really is interesting, because starting wages are below that (my first job was 55k), but with experience you can easily get into that range. If that happens your income before taxes significantly increase, but your hourly compensation after taxes not as much and so you obviously have to ask yourself whether the additional hours are worth it or whether you can make do with less.

Additionally it makes employers where you generally work less hours (e.g. VW) more attractive. But obviously this has an effect on productivity per person.

Re: Germany sees company bankruptcies soar

#68

Post by User23 »

hobs wrote: post #55
User23 wrote: post #43

Earlier quoted context omitted.

You’re providing a good example of how partisan bias makes you both snarky and stupid. For your own sake you may want to check that impulse. Otherwise, you are, despite your sarcasm, stating the truth. Nevertheless it might behoove you to learn more about how the US system operates. Like Biden after him and Obama before him, Trump had the choice to either sign the continuing resolutions that Congress sent him, or to…

The "lets get a huge tax break done" was absolutely his goal and plan and part of his election campaign, I didn't say anything partisan, simply stating that trump was absolutely part of the problem. You wont find me defending any president :)

Those “huge” tax cuts only cost 100 billion per year according to the NYT[1]. That’s nowhere near the trillion dollars added per year to the debt every year by reallocating the 2009 stimulus by continuing resolution for 15 years in a row and counting[2].

In fact as one can see from the data, the rate of increase slightly moderated during the Trump administration until the pandemic stimulus. Notably there is no corresponding end of pandemic inflection point.

[1] https://www.nytimes.com/2024/03/04/us/politics/trump-corpora...

[2] https://fred.stlouisfed.org/series/GFDEBTN

Re: Germany sees company bankruptcies soar

#69

Post by ivan_gammel »

InDubioProRubio wrote: post #35
ivan_gammel wrote: post #28

Earlier quoted context omitted.

Existing businesses could still exist, but Germans are often too risk-averse to adapt to new reality. I have read about a large bakery which closed because of relatively small increase in operational costs: it didn’t make sense to me as he did not try to change anything to save the business, but the owner was too pissed with good old times being gone forever. In countries like Russia he would be laughed at. The good…

The classic outsider perspective: I can move in several dimensions, why cant they? Cause its diffcult, by law, by the supply and demand of various ressources.

As a German living in Berlin I’m not exactly an outsider, though I do have an outside perspective. In Germany business environment is not harsh compared to many other places. Based on my observations here people are part of the problem too.

Re: Germany sees company bankruptcies soar

#70

Post by marcuskane2 »

hobofan wrote: post #66
constantcrying wrote: post #51

Earlier quoted context omitted.

The problem really is the progressive tax system, which directly promotes low productivity, since working more usually means lower and lower wages. I met many engineers who would be completely willing to work more hours, but it makes very little sense as you are working the additional hours for far lower wages. The idea of banning lower work times is new to me, but seems in line with the German government approach to…

> I met many engineers who would be completely willing to work more hours, but it makes very little sense as you are working the additional hours for far lower wages. "Far" lower wages? Progressive income tax is constant at 42% for essentially the whole salary range that is relevant for an engineer (66-278k). As a concrete example, total tax burden at: - 70k is ~40% (42k net) - 100k with ~44% (56k net) - 200k with ~4…

That's only part of the equation though.

If lower income means you qualify for subsidized housing, subsidized childcare, etc then that can be a big incentive.

I have two sisters with very similar lifestyles despite grossly different incomes. My low-income sister gets her housing, groceries, utilities, childcare and even phone paid for by government programs. My other sister (near median income) lives in an apartment of similar size and quality, buys similar groceries, etc but pays for all of it from her wages.

My low-income sister has no real incentive to increase her official income (although she does value informal economy "hustles" and side-gigs which directly give her disposable income).

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