7 ms·

Might be true, but in Germany, the salary you pay to your employee is also about 1% of all the labor cost for him or her. Which is hyperbole, of course, but Ger

Might be true, but in Germany, the salary you pay to your employee is also about 1% of all the labor cost for him or her. Which is hyperbole, of course, but Germany is one of those countries where the actual net payout is usually significantly less than 50% of the salary the company provides. I'm not criticising it as I think Germany is a good example of a well-working system but net salaries are low for most.

ok2938 5y ago
Germany has free schools, universities, low cost good child care, a relatively good health infrastructure, and more. Some regions do not even need debt any more to finance all this. The high taxes do not just evaporate, but sure could be used more efficiently. If I'd have the choice between US and Germany, I'd probably prefer the old Europe model.
MarcusE1W 5y ago
It’s probably true that the net salary is lower than some other comparable countries, although Denmark for example has also a quite low net salary. I feel the important bit is what you get for the net salary deduction. In Germany you have: - Free Education including University - A decent mostly free health system, health care insurance - unemployment insurance so your life does not completely unravel if you are made redundant and others are dependent on your salary - elderly care insurance - child care (could be better) - police that is not completely reduced to the absolute minimum - infrastructure that mostly works All of this is not perfect by any means, but you do have the feeling to get something back for your deductions. YMMV In some other even well developed countries it often feels like public services run on a shoestring and are just enough not to collapse. And some public services are in my opinion easier achieved if the state runs them, like infrastructure, transport, health and welfare services or police/security. You can go with private services and the lowest bidder but my feeling is that’s a downward spiral of what you get out of it in the end. So if you feel you get adequate services or services that otherwise are difficult to achieve I think it’s ok to have a higher salary deduction. Obviously this is a quite subjective subject, not one sock fits all.
- Akronymus 5y ago
  Even if you take the gross salaray it is MUCH lower than what the company actually pays. Last time I looked it up, the company pays about as much in insurance, taxes and such as your gross is.
  - realityking 5y ago
    That’s still an exaggeration. Non-wage labour costs are about 21% of the gross salary with most of them capped around 80k EUR of gross salary (meaning the employer pays 21% of 80k even if you make 200k). FWIW this includes health insurance. Now you do you have to count with some other potential expenses, like covering up to 6 weeks paid sick leave. I’m spire there’s some rule of thumb how to average that over a workforce but I’m not aware of it.
- noisy_boy 5y ago
  I would be _ecstatic_ to give up half of my salary for such a system which assures that irrespective of my employment/financial status, age or health, I'll get the care I need, until I die.
  - shakezula 5y ago
    Same. For me in the states, the argument is an easy one, because the plan in the states is pretty much "sell your house to afford your medical bills even after insurance and hope you don't run out of cash before you die". Our cultural attitudes towards elder care are most glaringly obvious in our healthcare system.
  - a254613e 5y ago
    Sounds great doesn't it? Too bad in reality with public insurance you get the basic care, while with private insurace (more equivalent to the US system) you get much more. For example you can find German news articles about how public insurance doesn't cover some tests that confirm/deny if you have some life threatning condition or not, even if you have all the symptoms and the doctors says that's the next step - while private insurance does cover additional tests. And private health insurance is only available to individuals earning well above the average German salary.
nicbou 5y ago
Eh the salaries are alright. It seems to me like the salaries are higher in America, while in Germany they're lower but include things American end up paying for: pensions, insurance, and education. If I were American, a part of my net income would still end up going to health insurance, student loans and other things. My employer might pay less benefits, but pay a higher salary to compensate for those costs. I think that a direct comparison is very difficult in that regard. That doesn't even include different expectations regarding work life balance, and legal requirements regarding parental leave and sick leave.
- steffen84 5y ago
  You are right except the german pensions they are a ponzi scheme and will fail in the future.
  - suction 5y ago
    This applies to all public pension systems, not only the German one.
    - jhgb 5y ago
      I'm not sure that any public pension systems in any way satisfy the definition of a Ponzi scheme. While public pension systems may be flawed, in no way are they fraudulent or otherwise non-transparent at the very least in democratic regimes.
    - vkou 5y ago
      This also applies to private retirement investments. My comfort in retirement is contingent on the economy, and hence, the stock market, growing. If the 'ponzi scheme' of limitless growth collapses, I'm not going to be any better off than the pensioner.
  - ishjoh 5y ago
    I hear this a lot about social security in the US as well, that it will fail. I would characterize it as degrading instead of failing. If the workforce declines there will be fewer payers into social security or pensions, then folks paying into social security will have to pay more, recipients will get fewer benefits, or the government will print money
jcfrei 5y ago
A well-working system? Germany only has an income tax but no wealth tax, unsurprisingly there's a huge inequality in wealth. If you earn your living in Germany through work you are basically a sucker: You have to hand on average 38.9% to the state. Taxation on capital gains, interest and dividends is 25%. This difference is compounding every year so the net effect over a lifetime is huge.
- suction 5y ago
  By well-working system I mean there are still enough checks and balances in place to make the rise of a figure like Trump or Putin very unlikely. And this of course is tied to economic well-being.
  - samus 5y ago
    Well, they could use a term limit for chancellors. The position is not as powerful as the US president (the term limit is really the most important check to the president's power), and most people will agree that Merkel did at least a decent job during her tenure, but long office terms tend to fossilize the political system.
    - suction 5y ago
      They don't do so in Germany though. I'd hate it for someone like Merkel being limited just because "her time is up".
- kaba0 5y ago
  Is the wealth inequality larger in Germany than in the US? Also, you still end up paying for all those things. And private health insurance will simply always be more expensive
  - adventured 5y ago
    It's comparable to the US. If you look at the roster of billionaires in Germany, and then look at their national median wealth figures, it's stark. Klause-Michel Kuehne scaled from Germany's economic size to the US economic size would go from $37b in wealth to $195b. That's Jeff Bezos. Dieter Schwarz scaled similarly would go from $26b to $135b. That's Bill Gates. Susanne Klatten scaled similarly would go from $24.6b to $128b. That's Zuckerberg. Thomas and Andreas Struengmann scaled similarly would each go from $21b to $109b. That's Warren Buffett. Stefan Quandt scaled similarly would go from $21b to $109b. That's Steve Ballmer. And so on. Germany has 30 of the top 500 largest individual fortunes globally; the US has 159. Interestingly that's the approximately correct scaling if you account for the difference in economic size (although one would expect it to increase even further with scale, and given the US also has other things in its favor (eg global reserve currency, military superpower); so Germany is more than pulling its weight in relation to the number of US billionaires at the top). Overall Germany had 153 billionaires as recently as 2019, while the US had 788 that year; once again that scales roughly correctly for the difference in economy size. So yes, the incredible wealth at the top in Germany is every bit as lopsided considering the size of the German economy. Germany's median wealth figure is below the US. That's despite the US massively debasing its median with tens of millions of poor immigrants from Latin America over the past 40 years (meaning those people are starting from scratch, typically with no valuable labor skills or education background, and often without even knowing English). Comparing apples to apples, US demographics to Germany demographics, US white people are drastically richer than German white people at the median. And it's also despite the US not having the much vaunted labor protection that the Germans enjoy. Germany, given its immense economic output, relatively stable culture and politics, high productivity, and strong labor protection, should have extraordinary wealth at the median. It doesn't (France and Britain both far exceed Germany in that regard; Germany is only slightly ahead of Portugal by comparison).
stingraycharles 5y ago
Which other European country would you suggest? I mean, if ASML can thrive in The Netherlands, surely Germany must be fine for TSMC?
- totalZero 5y ago
  (Ignoring the comparative suitability of European countries) It bears mentioning that TSMC and ASML are fundamentally different businesses in terms of their clientele, costs, inputs, institutional knowledge, sales volume, and other key characteristics. They operate at very different stages of the semiconductor supply chain.

ok2938 5y ago

Germany has free schools, universities, low cost good child care, a relatively good health infrastructure, and more. Some regions do not even need debt any more to finance all this. The high taxes do not just evaporate, but sure could be used more efficiently. If I'd have the choice between US and Germany, I'd probably prefer the old Europe model.

MarcusE1W 5y ago

It’s probably true that the net salary is lower than some other comparable countries, although Denmark for example has also a quite low net salary. I feel the important bit is what you get for the net salary deduction. In Germany you have: - Free Education including University - A decent mostly free health system, health care insurance - unemployment insurance so your life does not completely unravel if you are made redundant and others are dependent on your salary - elderly care insurance - child care (could be better) - police that is not completely reduced to the absolute minimum - infrastructure that mostly works All of this is not perfect by any means, but you do have the feeling to get something back for your deductions. YMMV In some other even well developed countries it often feels like public services run on a shoestring and are just enough not to collapse. And some public services are in my opinion easier achieved if the state runs them, like infrastructure, transport, health and welfare services or police/security. You can go with private services and the lowest bidder but my feeling is that’s a downward spiral of what you get out of it in the end. So if you feel you get adequate services or services that otherwise are difficult to achieve I think it’s ok to have a higher salary deduction. Obviously this is a quite subjective subject, not one sock fits all.

Akronymus 5y ago
Even if you take the gross salaray it is MUCH lower than what the company actually pays. Last time I looked it up, the company pays about as much in insurance, taxes and such as your gross is.
- realityking 5y ago
  That’s still an exaggeration. Non-wage labour costs are about 21% of the gross salary with most of them capped around 80k EUR of gross salary (meaning the employer pays 21% of 80k even if you make 200k). FWIW this includes health insurance. Now you do you have to count with some other potential expenses, like covering up to 6 weeks paid sick leave. I’m spire there’s some rule of thumb how to average that over a workforce but I’m not aware of it.
noisy_boy 5y ago
I would be _ecstatic_ to give up half of my salary for such a system which assures that irrespective of my employment/financial status, age or health, I'll get the care I need, until I die.
- shakezula 5y ago
  Same. For me in the states, the argument is an easy one, because the plan in the states is pretty much "sell your house to afford your medical bills even after insurance and hope you don't run out of cash before you die". Our cultural attitudes towards elder care are most glaringly obvious in our healthcare system.
- a254613e 5y ago
  Sounds great doesn't it? Too bad in reality with public insurance you get the basic care, while with private insurace (more equivalent to the US system) you get much more. For example you can find German news articles about how public insurance doesn't cover some tests that confirm/deny if you have some life threatning condition or not, even if you have all the symptoms and the doctors says that's the next step - while private insurance does cover additional tests. And private health insurance is only available to individuals earning well above the average German salary.

nicbou 5y ago

Eh the salaries are alright. It seems to me like the salaries are higher in America, while in Germany they're lower but include things American end up paying for: pensions, insurance, and education. If I were American, a part of my net income would still end up going to health insurance, student loans and other things. My employer might pay less benefits, but pay a higher salary to compensate for those costs. I think that a direct comparison is very difficult in that regard. That doesn't even include different expectations regarding work life balance, and legal requirements regarding parental leave and sick leave.

steffen84 5y ago
You are right except the german pensions they are a ponzi scheme and will fail in the future.
- suction 5y ago
  This applies to all public pension systems, not only the German one.
  - jhgb 5y ago
    I'm not sure that any public pension systems in any way satisfy the definition of a Ponzi scheme. While public pension systems may be flawed, in no way are they fraudulent or otherwise non-transparent at the very least in democratic regimes.
  - vkou 5y ago
    This also applies to private retirement investments. My comfort in retirement is contingent on the economy, and hence, the stock market, growing. If the 'ponzi scheme' of limitless growth collapses, I'm not going to be any better off than the pensioner.
- ishjoh 5y ago
  I hear this a lot about social security in the US as well, that it will fail. I would characterize it as degrading instead of failing. If the workforce declines there will be fewer payers into social security or pensions, then folks paying into social security will have to pay more, recipients will get fewer benefits, or the government will print money

jcfrei 5y ago

A well-working system? Germany only has an income tax but no wealth tax, unsurprisingly there's a huge inequality in wealth. If you earn your living in Germany through work you are basically a sucker: You have to hand on average 38.9% to the state. Taxation on capital gains, interest and dividends is 25%. This difference is compounding every year so the net effect over a lifetime is huge.

suction 5y ago
By well-working system I mean there are still enough checks and balances in place to make the rise of a figure like Trump or Putin very unlikely. And this of course is tied to economic well-being.
- samus 5y ago
  Well, they could use a term limit for chancellors. The position is not as powerful as the US president (the term limit is really the most important check to the president's power), and most people will agree that Merkel did at least a decent job during her tenure, but long office terms tend to fossilize the political system.
  - suction 5y ago
    They don't do so in Germany though. I'd hate it for someone like Merkel being limited just because "her time is up".
kaba0 5y ago
Is the wealth inequality larger in Germany than in the US? Also, you still end up paying for all those things. And private health insurance will simply always be more expensive
- adventured 5y ago
  It's comparable to the US. If you look at the roster of billionaires in Germany, and then look at their national median wealth figures, it's stark. Klause-Michel Kuehne scaled from Germany's economic size to the US economic size would go from $37b in wealth to $195b. That's Jeff Bezos. Dieter Schwarz scaled similarly would go from $26b to $135b. That's Bill Gates. Susanne Klatten scaled similarly would go from $24.6b to $128b. That's Zuckerberg. Thomas and Andreas Struengmann scaled similarly would each go from $21b to $109b. That's Warren Buffett. Stefan Quandt scaled similarly would go from $21b to $109b. That's Steve Ballmer. And so on. Germany has 30 of the top 500 largest individual fortunes globally; the US has 159. Interestingly that's the approximately correct scaling if you account for the difference in economic size (although one would expect it to increase even further with scale, and given the US also has other things in its favor (eg global reserve currency, military superpower); so Germany is more than pulling its weight in relation to the number of US billionaires at the top). Overall Germany had 153 billionaires as recently as 2019, while the US had 788 that year; once again that scales roughly correctly for the difference in economy size. So yes, the incredible wealth at the top in Germany is every bit as lopsided considering the size of the German economy. Germany's median wealth figure is below the US. That's despite the US massively debasing its median with tens of millions of poor immigrants from Latin America over the past 40 years (meaning those people are starting from scratch, typically with no valuable labor skills or education background, and often without even knowing English). Comparing apples to apples, US demographics to Germany demographics, US white people are drastically richer than German white people at the median. And it's also despite the US not having the much vaunted labor protection that the Germans enjoy. Germany, given its immense economic output, relatively stable culture and politics, high productivity, and strong labor protection, should have extraordinary wealth at the median. It doesn't (France and Britain both far exceed Germany in that regard; Germany is only slightly ahead of Portugal by comparison).

stingraycharles 5y ago

Which other European country would you suggest? I mean, if ASML can thrive in The Netherlands, surely Germany must be fine for TSMC?

totalZero 5y ago
(Ignoring the comparative suitability of European countries) It bears mentioning that TSMC and ASML are fundamentally different businesses in terms of their clientele, costs, inputs, institutional knowledge, sales volume, and other key characteristics. They operate at very different stages of the semiconductor supply chain.