The rise of robots in the German labour market
voxeu.org
voxeu.org
That seems like the fair and humane thing to do for workers, while at the same time not screwing over capital owners or stifling automation.
According to IAB 2.7 million workers have a second job in Germany (which is about 1 in 12). Most of them probably because they don’t earn enough in their first.
And yes, this means that those jobs are tax subsidized.
Mostly everybody with medium- or high qualifications should have no problems finding a well-paid job. Across all ages. In the western parts of Germany...
That's not a great reference point. It only works well if you're only talking about New York, Massachusetts and Connecticut.
California's GDP per capita is only about 8%-10% higher than Nebraska. Iowa is as high as Oregon. Illinois is 30% higher than Florida. Indiana is higher than Vermont. Wisconsin is higher than North Carolina. Minnesota is close to Maryland. South Dakota is higher than New Jersey or Virginia. Kansas is 20% higher than Maine. Missouri is higher than South Carolina. Ohio is on par with Rhode Island.
The US mid-west is an economic juggernaut compared to the rest of the world. It's larger than the economies of France or the UK, and nearly as big as Germany. Averaged out it's very comparable to the coastal states.
But how are populations developing? When people follow the money, GDP per capita evens out, maybe to the point of overcompensation given enough mobility and optimism to "make it there". Just look at how real estate prices are not matching the distribution of GDP per capita at all: real estate is less mobile than people.
(Edit: and yes, there surely are also some economic hotspots within the Midwest, some of those states are huge and have plenty of room to have their own internal concentration patterns)
Back to real estate, which brings us back to Germany, where rising real estate prices (both owned and rented) have increasingly been on people's minds recently: the solution cannot be just rent regulation or construction deregulation, it has to go to the root, find was to Conner concentration, to make the backwaters more economically viable, where housing prices ar not rising but in free fall.
According to this bar chart on wealth distribution in the EU [1] there is a huge difference between the average and median wages in Germany, so I would expect the group of poor workers to be much larger than we think it is.
Of course, being poor in Germany might mean something different than in the US, since we still have better access to healthcare (at least in my opinion, I don't know enough about the US system to be 100% sure).
[1]: http://media0.faz.net/ppmedia/aktuell/wirtschaft/831437975/1...
\EDIT: I should have cited the source accurately, the chart comes from the FAZ, a huge and respected German newspaper.
People in Germany seem to prefer rent over freehold property, this might explain Germany's low numbers compared to other states.
On the left there is wealth (/assets, "Vermögen"), then the next part is about the percentage of people who own houses ("Anteil Hausbesitzer"), and then comes the meat of the chart, the difference in gross annual income ("Bruttojahreseinkommen").
I am sorry to venture so far off topic, but I do most of my thinking either in German or in English which makes me vulnerable to stupid mistakes when the two overlap, so I would really appreciate it if you could tell me where I went wrong.
But IMHO the difference between median and average isn't that big in Germany, even smaller than in Austria which doesn't have Hartz IV and Euro-Jobs. What would you consider acceptable? Also consider that these numbers may contain salaries for part-time jobs too. And those numbers are from 2010.
It's probably just that I think that we should theoretically be in a good position to lower the divide between the rich and the poor, and instead it always seems to widen. I tend to forget that in a lot of other countries the situation is even worse, and maybe I should be thankful for what we have already achieved.
Thanks for the perspective, and a good Day of German Unity to you!
For the average German, buying a house means 30 years of debt: 300 000 EUR vs. 50 000 EUR salary (which is actually 30 000 EUR due to taxes and mandatory health insurance).
IMHO much of the difference between countries in this regard can be explained by tradition, history or population density.
Wages in Germany stagnated as well, domestic trade is dwarfed by export. Living has gotten much more expensive in the cities continuously moving the shrinking middle class further down.
Germany has a track record of being strong enough, so that revolutions seldom happen. But if they happen, the are almost guaranteed to be catastrophic.
Germany is becoming a low income country for a lot of jobs and the unions are doing nothing against it.
Year after year all German workers have collective bargaining agreements close to inflation, while the economy booms.
The union-reps are in bed with the companys and workers eat it up.
Yes, this is true. About 39% of the currently employed have so called atypical jobs [1] - some of which are actually subsidized by the state, because income is so low.
Germany is an austerity poster child - I wonder what will happen, if the export boom is over. Things might become much worse, once the debt-financed foreign purchases dry up for some reason.
[1] https://www.boeckler.de/108863_108907.htm (German only).
GDP 2007: $3.44 trillion vs 2016: $3.46 trillion
It has been averaging around 1.5% GDP growth since 2011. That is not booming. Germany may finally climb above the pre great recession era GDP numbers in 2017. Germany is having the problems that it is, precisely due to the lack of meaningful economic growth. There's no scenario where you're going to see almost any wage growth if GDP is mired in 0.5% to 1.5% type expansion; to make matters worse, the next recession will easily swat the recent modest gains right back down (which is one of the many reasons faster growth is a must, inevitably a recession will occur).
BIP in Germany in 2016: 3.1 trillion Euro
https://de.statista.com/statistik/daten/studie/1251/umfrage/...
1.5% GDP growth in a country with a developed economy and a constant population number is actually okay. In such an economy GDP growth is linked to population growth...
I imagine more of the problem is German factories have to compete with those in lower wage EU countries like Poland and so have limited room to pay more.
Schröder paved the way for the Arbeitnehmerüberlassung, which causes a massive rise in time restricted contracts and external workforce. Unions are very happy to keep this going, as this keeps salaries for proper employees higher than ever (a 20000 EUR difference is not uncommon for the same job), and bonus payments that amount to 10000 EUR for Porsche and 6000 EUR for Daimler. For the growing number of employees working under these contracts, it amounts to having a 30 to 40 per cent lower salary to your colleague who works beside you, doing the same job. (Add to that the constant yapping of the SPD regarding a perceived gender based wage gap and you know why they are so detested in large parts of the population.)
This kind of fight may be good on the short term, but it legitimates the fact than man are inferior to machine. For example, it may soon legitimates that, contrary to man, the machine works non stop, doesn't go on strike, doesn't want a raise, doesn't go to the toilet, whatever...
If machines are to rule, then we have to change the way we redistribute the worth they produce.
Kim Kardashian and Paris Hilton did no actual work, yet made a lucrative living, even in their late teens.
Almost everyone has personal family+friends that they value in ways other than needing their labor. But it doesn't scale. People have a Dunbar number of somewhere a little (perhaps a lot) over ~140, but nowhere near a nation-state population.
(To nitpick on myself, it could be argued that war campaigns were also mostly agricultural work: they were just harvesting other people's fields)
50% of careers gone within one lifetime. And the US did better then ever.
>If machines are to rule, then we have to change the way we redistribute the worth they produce.
In theory if there is enough competition the price of the good decreases through automation.
Imagine you're a business selling clothing where 50% of the cost is labor and the rest are materials. You now buy a machine that replaces the labor cost with a 10% robot cost. You make 40% profit on everything you sell. Someone else builds a factory and sells the same good for 70% of the price. Consumers now have more money available to spend on other goods that are more "labor" intensive.
Unfortunately in practice we have monopolies/oligopolies everywhere.
Exactly.
And to me robotics is so capital intensive that you'll inevitably have such monopolies (like in oil industry).
That's why I don't like when people look only the tool instead of the people affected by the tool (be they on on good or bad side of it).
There are probably things you don't even immagine to pay for, that are now done by machines, and that used to be performed by humans.
Think of circuit-switching telphony, when you used to say "operator, connect me with number xyz-xxx" and someone on the other side would phisically create a connection between you and someone else to talk.
Consider mail delivery. There used to be a milkman. Mail was only paper.
A lot of stuff.
On the same planet, self driving cars are about to be easily available, no more drivers or cab drivers, amazon has robots doing most of the heavy lifting (quite literally) but we enjoy these other things, and do not complain about anything because they're cool, i guess.
I cannot wait for this thread to be featured on n-gate.
What would the alternative be? Force businesses to hire me to "do my best" to fly people around?
Will this create social problems if / when machines are better than humans at everything? Sure, just like it happened in each field once machines were better at something - starting with the sewing machines and the luddites, if I'm not mistaken.
I do believe that the final result will be a Star-Trek-ish society where everybody has access to most things for free, and where everyone works only if they want to; however, I don't believe it will be easy to get there.
Fact is that right now, in every media, machines are presented as a threat to employment of men. By presenting it as such, media imply the fact that for employment, machines are better. At the same time, governments, spend most of their time fighining against unemployment, which sort of criminalize people who don't get a job (they don' look hard enough, they're not flexible enough).
So all of this lead to a big problem : people don't get job and it's their fault and, moreover, for the simpler jobs, men are inferior to machines. So basically, we show men under a very dim light. That's what I see all around.
Now, if you tell me that machines will remove the hard part of some jobs (like heavy lifting, working in polluted environement, etc) and, at the same time, the benefits made by those who have machines ('cos machine are cheaper than men) are fully redistributed (save for capex) to those who lost their job, then we can have a talk.
This results in a complicated role for both sides that isn't just adversarial as it is in most other countries. Labor shares the responsibility for the company's future and gets to be part of every step of the process when it comes to making hard decisions. But it also requires management to strive to improve their employees' well-being, since they will often require their cooperation.
If these specific solutions are anything but band-aids/wishful thinking/PR remains to be seen. Germany has, just like all other countries, seen an increased use of time-limited contracts and temp agencies, leaving many employees in perpetual danger of immediate social decline if the economy hits a road bump. And it isn't quite clear if the rise of machine learning + robotics isn't the one innovation and bucks the trend, and actually does create a class of people that is essentially shut out of the jobs market by machines that are strictly more productive at any job they can realistically perform: there's only so much programming you can teach a bricklayer in his 50s.
https://www.statista.com/statistics/498424/number-advertisin...
However, it's the newspaper jobs that have gone:
https://www.theguardian.com/media/greenslade/2016/jun/06/alm...
The next thing to look at would be the change in IT jobs.
We are already deep in the current cycle of disruption by software. "IT" (if you include programming, security, data centers, support staff etc) is fairly large and more diverse than advertising and/or "newspaper".
I don't think it works like a waterfall / Gantt chart; it happens in parallel and we are currently seeing lots of white collar office jobs changing. (HR|Finance|Recruiting|Legal Council|Retail) are all getting optimized to the point that their ranks are thinning quickly. My first job was moving physical file-folders between a storeroom and an office -- that job is now obsolete as those files have largely been digitized.
See "The Rise of the Machines – Why Automation is Different this Time" video by Kurzgesagt: https://www.youtube.com/watch?v=WSKi8HfcxEk
Germany is not really a separate country. It is a state in a union called the Eurozone, and controlled by a constitution called the Treaty of the European Union.
You cannot compare a currency zone such as the USA to Germany - a state in a currency zone.
Germany drains demand from the rest of the Eurozone to maintain its employment level. The unemployment arises in Greece, Spain, et al instead.
If you look at the near fully employed state areas in the USA and draw a line around them, then compare those with Germany you'll get a better idea.
Within the US there is an 'export boom' from California and New York to the rest of the union. Similarly in the UK from London to the rest of the country.
It's time for economic analysis to catch up with monetary theory. Floating rate currency zones matter.
Few people thought in 1980 that there would be more computers than people in their lifetime.
Of course what happened is the jobs went to China.
EDIT: quote from the book...”the Cold War is over, the Japanese won”
where they are in the process of being taken over by robots.
perhaps more interesting is the background info about the global focus of industrial robotics: it's in Japan (and to a much lesser extent, Germany) -- but not the US.
this reinforces my current belief that robotics startups in the US face a pretty serious uphill battle from day one.