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(1) My comment was an addendum to the post which (partly) explained to another post(er) why German companies aren't moving their production to cheaper markets.

by binarray2000 9y ago

(1) My comment was an addendum to the post which (partly) explained to another post(er) why German companies aren't moving their production to cheaper markets. I remind you of this because the author of the article and many people here have a rosy view of the economic situation in Germany. Seeing only the "positives" and blending out the "negatives" because they don't fit the official narrative isn't helpful for our discussion. (2) Germany is the biggest country in EU (EU != Europe), has the largest workforce and, thus, the largest low-wage sector. Yes, that is correct. But it is not "easy", as this Eurostat graph shows: http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Low-wage_earners_%E2%80%94_employees_(excluding_apprentices)_earning_less_than_two_thirds_of_the_median_gross_hourly_earnings,_2014_(%25_of_employees)_YB17.png http://ec.europa.eu/eurostat/statistics-explained/index.php/... You see Germany in the company with such economic powerhouses as Estonia, Poland, Lithuania, Romania, Latvia - all of them having a bit worse PERCENTAGE of low-wage workers than Germany. This is not someone's perception, or some narrative, these are hard numbers. (3) You obviously didn't read the articles I've posted. Especially that from Nachdenkseiten as it lists many other issues not widely spoken about in the mainstream media - neither in Germany nor in other countries. It is an analysis from Prof. Dr. Gerhard Bosch (Geschäftsführender Direktor Institut Arbeit und Qualifikation Universität Duisburg-Essen). While we discuss the article published oh hbr.org, which talks about the causes for the success of the German economy, Mr. Bosch mentions the elephant in the room: > German economic policy continues to be characterised by its excessive focus on exports. As a way of dealing with the euro crisis, the German federal government advises other countries to introduce their own labour market reforms on the model of the Hartz Acts. This policy, however, cannot be applied at will to other countries, since only by abolishing the laws of mathematics would be it possible for all countries to have export surpluses. Meaning: German model doesn't work for others. And, it only works for Germany because others take a hit while Germany "takes" a surplus. Yes, German economy/society has it's qualities. But would it be such a "success" without major influence in EU institutions, in ECB, without Euro, with other countries having their currencies (which they can devalue to make their good cheaper and imported - German - goods more expensive), with customs on its goods, with fairer wages in Germany? I highly doubt it.

lispm 9y ago
> why German companies aren't moving their production to cheaper markets German companies ARE moving their production to cheaper markets. They have been doing this for decades and they are doing it today. At the same time the market has expanded and changed. Thus new jobs are created, even a few are coming back. If we talk about manufacturing, which was the original topic, you can see multiple trends (examples in parentheses): exports of jobs (ship yards), back-import of jobs (automated manufacturing), disappearing jobs (nuclear industry), creation of new jobs (renewable energy), ... > economic powerhouses East Germany is our own 'economic powerhouse'. Twenty million people with a much different job market, compared to West Germany. > You obviously didn't read the articles I've posted. None of that is new. If you read German mainstream media, that stuff has been discussed for a long time. FAZ, Handelsblatt, etc. have published a lot of these arguments. It's just that for each economist arguing that way, we can find another one, which argues against it. The media published this discussion. You just have to read it. > abolishing the laws of mathematics That's a very simplified argument, with a very limited view what actually happens. > But would it be such a "success" without major influence in EU institutions, in ECB, without Euro, with other countries having their currencies (which they can devalue to make their good cheaper and imported - German - goods more expensive), with customs on its goods, with fairer wages in Germany? I highly doubt it. Germany has influence not because the ECB or the Euro. It has influence because it is the largest european country, it sits in the middle of europe. ECB policy has NOT following German demands. The Euro was not a German invention. But that European monetary systems have been influenced by Germany because of its economic power has always been true. If you look back, Germany has export oriented with large surplus for decades. Without the Euro, with the European Monetary System, with the Euro. The german economy will simply adapt to the changing conditions: weak currency, hard currency. The industry will react, but it will always be export oriented. Generally the economists prefer a harder currency, which actually will not have a specially negative effect on the export industry. With the super-hard Deutsche Mark, the export industry was doing just fine.

lispm 9y ago

> why German companies aren't moving their production to cheaper markets German companies ARE moving their production to cheaper markets. They have been doing this for decades and they are doing it today. At the same time the market has expanded and changed. Thus new jobs are created, even a few are coming back. If we talk about manufacturing, which was the original topic, you can see multiple trends (examples in parentheses): exports of jobs (ship yards), back-import of jobs (automated manufacturing), disappearing jobs (nuclear industry), creation of new jobs (renewable energy), ... > economic powerhouses East Germany is our own 'economic powerhouse'. Twenty million people with a much different job market, compared to West Germany. > You obviously didn't read the articles I've posted. None of that is new. If you read German mainstream media, that stuff has been discussed for a long time. FAZ, Handelsblatt, etc. have published a lot of these arguments. It's just that for each economist arguing that way, we can find another one, which argues against it. The media published this discussion. You just have to read it. > abolishing the laws of mathematics That's a very simplified argument, with a very limited view what actually happens. > But would it be such a "success" without major influence in EU institutions, in ECB, without Euro, with other countries having their currencies (which they can devalue to make their good cheaper and imported - German - goods more expensive), with customs on its goods, with fairer wages in Germany? I highly doubt it. Germany has influence not because the ECB or the Euro. It has influence because it is the largest european country, it sits in the middle of europe. ECB policy has NOT following German demands. The Euro was not a German invention. But that European monetary systems have been influenced by Germany because of its economic power has always been true. If you look back, Germany has export oriented with large surplus for decades. Without the Euro, with the European Monetary System, with the Euro. The german economy will simply adapt to the changing conditions: weak currency, hard currency. The industry will react, but it will always be export oriented. Generally the economists prefer a harder currency, which actually will not have a specially negative effect on the export industry. With the super-hard Deutsche Mark, the export industry was doing just fine.