German chancellor Friedrich Merz ...
lashed out at German workers to
“simply do a little more,”
Germany literally pays people to do nothing.
A friend of mine, an engineer who works in the German car industry, recently told me that nowadays he has a lot of free time. Because the company he works for has so few orders that the company is granted "Kurzarbeitergeld" - the government pays 60% of the salary if the employees work less.
That blew my mind. If I had fewer orders, I would work more to increase the quality of my product and my efficiency. Working less as a reaction to losing market share seems completely counterproductive to me.
When my eldest daughter was in high school (~2010, Argentina) there was a provincial policy where if every single student had a result below a certain score in a test, the scores had to be re assessed against the maximum result.
The resulting situation here was that she was constantly bullied into underperforming. Both cases are actually similar in that each individual has a personal incentive to underperform - the difference is that in your friend's case the policy is granted at the company level so no single employee can defect and break it for the rest, while in my daughter's case one high scorer could invalidate the reassessment for everyone, which is exactly what made defection punishable and the bullying emerge naturally.
This is the natural result of "equity" which is the academic jargon term for "forced equality of outcome". High achievers are attacked. People who push us forward are demonized. The low achievers are never pushed to be better. And the average drops.
It’s not that absurd and happens all over the world in university systems. I had a Comp. Sci. Professor that taught assembly and graded on a curve. As you might imagine the one guy that was a wizard at assembly caught flak from the unwashed masses.
I had another professor that not only did a curve but dropped statistical outliers to prevent this problem, he literally explained his system on Day 1 of the course. This was 15+ years ago and by no means a new idea.
I tried to search for it, but even the 2 documents that superseded the one from around the time my daughter was at school at not available.
I mean, the site doesn't even have a valid secure certificate so...
In the site below (In Spanish) you can search for 10/2019 and a cursory translation of the document title will show that this is the proper document (For 2019 onwards, the replaced doc 04/2014 isn't available either)
The problem is they don't get rid of their ICE cars any more - most of the world is transitioning to EVs and China - their previously biggest importer - has strict EV quotas and no one wants to buy German EVs that are too expensive and less capable than Chinese made EVs.
Germany was ahead in EVs and solar - both industries have been cuto off by conservative/free-market ICE lobbysts and these 2 huge global markets are now dominated by China instead.
> has strict EV quotas and no one wants to buy German EVs that are too expensive and less capable than Chinese made EVs
Both China and the US have enacted trade barriers against EU originated auto drive goods.
A Chinese VW ID4 is manufactured in Shanghai and an American one in Tennessee. And that is the crux of the issue - consumers are still open to buying a German badged product, but it won't be "Made in Germany".
And where else can Germany export?
The individual EU states are protective about exports by leaning hard on nationalism and union support as seen in France (Renault+Stellantis) and Italy (Stellantis), India demands China- and US-style JVs and domestic manufacturing as well even despite the EU FTA, Japan and SK prefer buying domestic, Russia is blocked due to sanctions, ASEAN+Africa is flooded with Chinese, Japanese, and Indian manufactured cars already, and South American is flooded with Chinese, American, Japanese or domestically manufactured cars.
Germany Inc will remain in Germany as long as Germany makes itself attractive. Otherwise, they will leave, as they have already done so for the US, China, the CEE, and increasingly India.
Broadly speaking they're not _as far away_ from Chinese EVs as we all make it here to be. However, the problem is that the stockholders of all these companies expect 500% YoY growth which isn't sustainable. Not to mention the cost of a car has grown significantly while all German cars have degraded substantially in quality. For example, you can expect Porsche to sell FOREVER the number of cars they manage to sell in the 00s and 10s:
Broadly speaking internet commentary about cars is crap and the differences between any two competing products (i.e. ignore the dishonest comparisons between a Chevy Cobalt and a Toyota Landcruiser) are way, way smaller than the online fanboys, shills and people with a very expensive purchasing decision they want to feel validated in will lead you to believe.
Depends on your position I guess. If you are a worker at a conveyor belt, it doesn't make sense to work more to produce more cars nobody needs. I think originally this policy was designed to save jobs during temporary downturns, not to save industries going downhill
If you start with a couple hundred thousand $, I can see that. But if you start with like $10,000, how do you stop market fluctuations from eating your money before your correct prediction turns into runaway compounding gains?
That is true for RnD not for Factory workers. Germany has quite strong workers rights, so mass layoffs are not a possible solution to safe money if facing lacking orders.
Essentially companies get some of the money back they and their employees paid as taxes.
> If I had fewer orders, I would work more to increase the quality of my product and my efficiency. Working less as a reaction to losing market share seems completely counterproductive to me.
That may work if you are a sole proprietor or small business person, but that's not how shareholder owned corporations work.
A sole proprietor is willing to work more if business drops (effectively lowering their compensation rate) because they are the beneficiary of any future gains that may (or may not) result from their short term sacrifice. If they want their employees to do the same they have to give them the same deal.
A large corporation can't easily make its employees work much longer for the same pay (except in the very short term), nor can it easily get shareholders to be OK with increasing spending on labor. This usually ends with massive layoffs when it can't sustain itself anymore.
That's one reason that smaller companies can be more nimble.
Actually this is not as easy as it sounds. Quite a few companies opt not to go into 'Kurzarbeit' because it means that you go under extra scrutiny as it is only there to stop major layoffs, which would cost our social insurance system even more. There is typically enough mechanisms to make it unattractive enough, that even unions accept unpaid leaves instead.
IMHO there is bigger productivity problems. After COVID sick leave has massively increased. Many women do not work as much as they want because child care is still sketchy. There is often simply no incentive to work more because engineering careers are quite limited: general pay compared to expenses is really good, but top performers earn considerably less than in other countries.
You cannot indefinitely ask employees to do more for less money. According to law and job contracts you can only do so much unpaid overtime. Usually 10h instead of 8h, and only when justifiable. Everything else is illegal. Paying 60% and working less is hoping for the environment or situation at the market to change, whether or not that is realistic.
How does this blow your mind? Your suggested action is illogical since the standard way to deal with this problem is to fire workers, but if demand is seasonal, it means you constantly have to fire and rehire, so instead of firing full workers, they just fire part of their working hours.
The crazy part is that the government subsidizes this, which creates perverse incentives, but that's a different problem.
Depends on where you work in the industry, there's a huge level of division of work. Upstream departments should work more on new products and marketing etc. But a little more downstream, there isn't much todo if not enough cars are ordered.
The intention of Kurzarbeitergeld is to prevent large layoffs. I honestly can't tell if that makes sense in the long run, but it seems reasonable for a political party trying to make it to the next term.
So let me get this straight: you have exactly one data point, and the second data point using is a German chancellor widely regarded as one of the worst by many measures. Right?
This is FUD. They said the same about the Greeks in 2008, it is complete BS. In any given org, passed a certain size you'll find ppl who slack a lot and people who work for three. Unfortunately that seems to the nature of large orgs, nothing special about Germans...
ps. I'm having a DejaVu. This is the exact same narrative Greek politicians used against the Greek population to justify them become poor overnight.
A friend of mine, an engineer who works in the German car industry, recently told me that nowadays he has a lot of free time. Because the company he works for has so few orders that the company is granted "Kurzarbeitergeld" - the government pays 60% of the salary if the employees work less.
That blew my mind. If I had fewer orders, I would work more to increase the quality of my product and my efficiency. Working less as a reaction to losing market share seems completely counterproductive to me.