Basically I just want to encourage you to read this paper by Hans-Werner Sinn and Timo Wollmershäuser. It has also been endorsed by Martin Wolf.
It's pretty difficult stuff and I don't actually expect many if any readers to actually read it. But you really should; it's illuminating even if you don't understand every sentence.
About commenting Jesse Schell's book on game design: I still intend to do it. But last week my search for a new job has turned out to be pretty crazy. I had sent out the application quite often because I remembered the last time I was looking for a job. That was right after finishing university, in November 2008, one month after Lehman Brothers had gone bust. Back then I got a job in March 2009 which also was the month when the world's stock markets stopped falling. The Dax was at 3600, if I remember correctly, and, fortunately, I was quite an optimist back then, too.
Anyway, the job application was pretty difficult back then and I was probably lucky that my second interview already resulted in the kind of job I got. Last week, however, things were radically different. My phone was ringing almost constantly - even on Friday which was a public holiday. It seemed as if every single human resources guy I had written wanted to call me back as soon as possible. The paper linked above may help explain this, by the way.
I've already been introduced to some very interesting jobs. Moreover, I think I'm going to walk into salary negotionations with a fairly strong bargaining position. Anyway, the constantly ringing phone is my excuse for not writing on the blog as much as promised :)
Good luck!
ReplyDeleteAh, this is why you link a 47-pages paper? To keep us occupied? :P
ReplyDeleteThat's a good idea, Helistar ;)
ReplyDeleteNils, I was under the impression that unions in the Bundesland 'negotiate' on behalf of employees for salaries, basically that there are fixed scales of pay and one merely lines up their credentials against the scale.
ReplyDeleteHow accurate is this, what should be modified from this understanding?
Lastly, chapeau to you and your fellow countrymen for the record lowest unemployment rate.
It depends on the sector, Ahtchu. Some sectors have strong unions, others do not. But even if a sector has a strong union, you can still usually negotiate.
ReplyDeleteMake no mistake and confuse German unions with the ones in the US. Here, the unions do not consider themselves the opponents of the employers, but their partners (and vice versa). Just because a union is strong, in no way means that there is no flexibility.
Contrary to Mr. Romney's believe, we don't actually live in socialism ;)
Thanks for the chapeau. But it's probably a bit unfair. While it is true that Germany's unions and employees accepted stagnating wages during the last ten years to improve global competitiveness, it's also true that all those investors who went to the periphery during the last decade now suddenly turn around and rush to the 'safe haven'.
Also, the latest lows of the € are like gasoline for Germany's exports right now.
A couple of surprising things in that report. First off the number of spelling errors for such a high level report is alarming.
ReplyDeleteAlso interisting is that Italy had a surplus target balance in the Euro zone. I thought they were in the hole along with Spain. England is also left out of the equation and seems to be going their own way.
Here is the long TLDR summary. Germany bascially financed all of Europe's weaker countries. If the Euro goes under Germany loses big time. The weaker countries are trying to finance this debt through inflation (printing money) and Germany wants to use gold transfers (like the US Ferderal Reserve does).
England which wasn't mentioned wants to stay out of this mess. Greece, Ireland, Portugal and Spain have created a real problem and Germany so far to save the Euro has bailed them out. But credit si running out.
Another thing the report says is that Germany benefitted greatly by the crises in these Euro countries. It lead to boom times for them.
Then on page 36 they seem to argue that allowing the banks in these coutnries to go bankrupt would be a good thing. They supported the initial bailout but are against further ones.
Final TLDR. Europe is in a real mess. Unless things change drastically they won't be able to finance the GIPS issues past 2013. So the choices are drastic. Some want a special fund (but in my opinion this is more gimmicks) that save German banks and the Euro, or the Euro goes under and Germany loses big time. Or Greece, Spain, Ireland and Portugal reduce wages and prices (standard of living) which also in my opinion they won't do.
My predictions: England will stay out of this putting pressure on the Euro. Germany will put pressure on the GIPS countries to enact austerity measures. But if France or Italy fall into the GIPS sphere the Euro is doomed.
Thanks for this genuine US-conservative point of view, Goodmongo. :)
ReplyDelete47 pages?!
ReplyDeleteCan't those economy guys publish this at a peer-reviewed conference/journal that requires them to boil it down to a more manageable size? Everybody can write long papers, writing short ones is an art. ;)
I didn't read it, I'll admit. In my defense, it's not my field of expertise. In fact, it's so much NOT my field of expertise that, even though I had economy minor courses, I never even understood how money appears out of thin air and disappears again. It was as hopeless as teaching algebra to the stereotypical literature major. *sigh*
However, good luck in the job market, though you probably won't need it. I don't know what you did at Fraunhofer, but people from there typically don't spend a lot of time in the job market. :)
I am not a delusional American when it comes to foreign matters. I've, in fact, lived well in excess of half my life abroad, and am intimately familiar with languages and customs of many a foreign nation. That being said, it is impossible to grab every last detail about all societies, let alone just the simple one that one might live in.
ReplyDeleteRegarding unions (and will not enter into the political debate this time =D), I inquire as I push to seek employment under an industry sector with IG Metall as the reigning union. The rates I see posted are, frankly, unimpressive compared to US pay for comparable work. On top of this, Germany's 40+% income tax compared to the US's 10% makes the net GE salary numbers about half of the US's. This isn't a slight against Germany, the systems are different in many ways (details details), but that is all they are: different. I inquire as it would be good to know that negotiating a salary is still very much possible to perhaps receive wages that would permit becoming, well, your neighbor.
Details perhaps for another day, medium.
Ahtchu, a sector with a strong union in the US will usually push through considerably higher wages than in Germany. And if you add German income-taxes, social insurances and value-added taxes, you are left with significantly less money than in the US. Moreover, the US average GDP per capita is still a bit higher than in Germany (although it's difficult to determine what the exact implications for the average citizen with an average income are.. and whether PPP or exchange rates should be used).
ReplyDeleteYou are correct that it's quite difficult to compare societies. Should you end up moving to Germany I'd be quite interested in your personal comparison. And one final tip: if freely available income is very important to you forget Germany and forget the US. Go for Switzerland - or even better - Norway. And if you are crazy: Luxemburg. But they won't give you a job ;)
Ok, so then it's confirmed. I knew to expect a pay cut, but from the looks of it, it would be considerable indeed. More to mull over.
ReplyDeleteAh, you removed the comment about stone and wood houses. I was about to blow a hole in the argument by saying neither has anything to do with the government ;) Also, your comments about energy are a bit biased considering the town you live in.
On a similar note, you spoke of comparisons, here's one:
It's been about a decade since I've been to Germany, and traveling on ICE to Frank.a.Main crossing the border was immediately apparent. BAM! Windmills, solar farms, very tidy country road traffic. It's one of the reasons that it is apparent to me, a conservative (oft confused with Republican) globetrotter, that GE is poised to become even more of a powerhouse. Nevermind the chapeau of earlier: when other countries rebound (everything operates in seasons of feast and famine), the high-end exports that GE produces will further catapult the economy. And in the meantime? Building up on renewable energy for both own consumption, perhaps as yet *another* export 2 decades from now? It's all the right moves that all the big world players should be making, yet GE is truly alone with the push here (yes, I'm aware of the internal oppositions involved with eyesores etc, but the sentiment remains). That, and GE has women with dirndl. Nuff said in that department ;)
And on that note, I've sidelined this OP enough, merely wanted to ask a related question to a segment of the OP. Thanks for all the info, Nils, per usual.
The funny thing about stagnating German wages during the last decade is sometimes that people point at Germany and talk about it being Europe's powerhouse and they praise the rational employees and - yes, in a way I agree.
ReplyDeleteBut when the same people would be affected they suddenly understand that low wages actually do have consequences: the most immediate one being that you have less money if you work here...
:)
But when the same people would be affected
ReplyDeleteThere is a perfectly good explanation for seemingly ironic circumstances, but involves personal details. Email to follow.
I know I said I was done sidelining the OP, but there's actually another semi-related question (benefiting all your readers) that perhaps you have insider info regarding (you often do): wealth concentrations. Europe, being largely socialist-oriented, will still have a divide in income breakdowns. Do you have any charts or information pertaining to x amount of wealth held by y percent of pop, for various earning categories?
Ahtchu, I don't mind sidelining a post with few commenters. It's just when I write about e.g. global warming and a lively debate starts that I try to keep it on topic.
ReplyDeleteAbout my legendary insider knowledge .. I don't think I know much more than google does ;)
On your question, it's pretty difficult to find such statistics for Europe. It should be somewhere at Eurostat.
In any way you have to keep in mind that Europe is not as homogenious as the US - even though as far as I remember the overall European Gini index (for income?) is actually lower (more equal).
On wealth distribution in Germany there's a wikipedia page. You may be able to make sense of it with the help of google.
It seems that, in 2007, the richest 10% of Germans owned 61,1% of all wealth and the lower 50% owned exactly 0%. So much for socialist Germany. Fortunately the income distribution is a bit better.
Seems that the left's favorite billionaire Soros has come out and said the Euro crisis is worse than the 2008 crises in the US. He's prediction a massive cycle of deflation.
ReplyDeleteEver wonder why the OWS people never protest this 1% guy, or the left never complain about his wealth?
The world seems to be inherently unfair, Goodmongo ;)
ReplyDeleteNot unfair at all. Just filled with bias. Which is fine as long as people acknowledge the bias.
ReplyDelete