Germany goes from labour shortages to hiring freezes
ft.com
ft.com
Yes I'm bitter how much influence the German car companies have over the union.
"But they provide jobs!" is the usual rebuttal.
Well, they ain't doin' that any more, are they?
People who support stuff like this, are unable to think 15 minutes past their own actions. They can't comprehend the negative externalities and second order effects of the policies they support. They easily get manipulated to just blindly support feel-good policies based on own-group tribalism, platitudes and vibes, especially the German voters.
Same like the crowd who thinks rent freeze is the solution to rising rents. They don't understand supply and demand, so they can't comprehend how this will lead to a massive housing disaster down the road, they just want frozen rents for themselves now, and 'after me, the flood'. Hell, people don't even understand how inflation works, they think prices increases just come from greed of business owners, they can't fathom how currency is being devalued by massive government money printing that inflates assets and devalues their labor. This is beyond their level of understanding.
When you work public facing service jobs, you realize just how stupid the average person is, so no wonder politicians and elites can rob us blind via laws and policies implemented with our own accord, while then having us blame each other and fight over sports-ball.
Sorry if I sound overly nihilistic, but this is my conclusion after so many years of human interactions on this planet. We get the leadership and outcome we deserve, nothing more, nothing less.
For example, you are right about rent freezes and protection of non-infant industry; however, there were studies showing that ~40% of inflation at the end of Biden’s term was due to “greedflation.” This should not be surprising to anyone who understands that massive consolidation in industry leads to less price competition. Moreover, there were CEOs on shareholder calls bragging how they could get away with price gouging, using inflation as an excuse to justify an order of magnitude more price hikes than inflation justified. We do not need to take their word though, as if inflation was the only cause of inflation, then firm profits should have stayed around the same book ratios, but during the time I discussed firm profits ratios increased dramatically.
So let me make a symmetry argument: why are you so angry at ignorant individuals who throw the baby out with the bath water and dismiss your valid “pragmatist” takes, when you yourself are ignorantly throwing the baby out with the bath water dismissing many valid “greed and consolidation” takes?
Studies approved by the government show the government is not to blame for the economic situation it created, but the "greedy corporations" are to blame. OK, sure.
>This should not be surprising to anyone who understands that massive consolidation in industry leads to less price competition.
Consolidation which was only possible due to ZIRP era excessive government money printing and lack of anti-monopoly law enforcement, therefore it's the same government being the core issue as I was talking before.
> Moreover, there were CEOs on shareholder calls bragging how they could get away with price gouging, using inflation as an excuse to justify an order of magnitude more price hikes than inflation justified.
So? Of course companies would raise prices if they could. Same how employees would raise their wages, if they could consolidate their bargaining power via unions. Everyone is greedy and self serving when they can get away with it.
The government is the one paid by us who controls and enforces anti monopoly laws. Why didn't they?
>when you yourself are ignorantly throwing the baby out with the bath water dismissing many valid “greed and consolidation” takes?
Because greed is a universal human trait that applies to everyone from employees, to landlords, small business owners, doctors, car dealers, handymen and builders, etc not just corporations. They all want more money than their peers, to get ahead and provide a better future for their offspring, regardless of societal consequences to those below the pecking order.
All the issues you mentioned above, are just secondary order effect from the government's red tape and monetary policies and lack of anti monopoly enforcement. Blaming only the "greedy comparisons" as the root of all evil, is just reductionist scapegoat propaganda that's easily digestible by the simpleton midwits, supported by the government to deflect the societal consequences they're responsible of creating.
No corporation is stronger than the governments. Corporations only operate within the framework of rules created and enforced by the government. Governments control the laws, courts, police, jails and military. They can have the CEOs of the F500 up against the wall and shot for treason or locked up in jail if they wanted to. If F500 rob you and get away with it, then blame your government for enabling them to do it, because ultimately corporations are doing it legally with the approval of your government you pay taxes to.
The reason simpleton midwits always default to blaming the "greedy corporations" for everything is simple: When the government prints zero interest money and devalues your wage and purchasing power, banks and corporations are the smartest and first in line to use that free money for consolidation and stock buybacks, immediately pushing the price of assets up. But ultimately it's the government's fiscal policies enabling this. Corporations are just smarter and faster to taking advantage of the fiscal environment the government cretes. Savvy average people also take advantage of this too, by using that cheap money to go in debt to buy stocks and property to increase their net worth and then have the inflation reduce the value of their debt.
It's the working class who has no assets that gets left behind, but again, that's caused by the government devaluing their labor via money printing, not the corporations. Corporations are better and navigating the environment the government creates because they hire smart savvy well educated specialists to exploit this environment legally, whereas average people are too stupid to know how the system works, they just blame corporations and the rich.
Don't believe me? Just Google it, ChatGPT it, Gemini it, Grok it etc, they'll tell you the same thing I did.
Effectively, I could make a symmetrical argument and every time you blame the government, I can blame the private interests that primary influence government — especially since citizens united but even before then. Obviously this tactical trick you and other “pragmatists” rely on is therefore fallacious as it leads to a contradiction when you apply it evenhandedly.
I have respect for many libertarians but you are not one of them.
You always manage to say nothing of value, just accusations.
>I have respect for many libertarians but you are not one of them.
I'm not looking for your respect since you never once argued in good faith in this thread, you added no arguments to prove me wrong, just accusation in quotes. Ignore the truth, keep your head buried in the sand.
The two examples are not really representative, “press spokesman at a small industry association” and entry-level “apprenticeship in marketing communications and a bachelor’s degree in international management”. I don’t want to say that they are completely bs jobs but, well, these are quite niche. Both seem to be only ‘affordable’ for a strong economy, not during an economic instability.
What I’d like to get answers to is why if everyone says about shortages of nurses, doctors, teachers, plumbers and other handymen, highly qualified engineers capable of making some complex stuff like rockets; I don’t really see any policy makers pushing to make such jobs more appealing, I don’t see people around talking about moving to any of such areas even if they struggle or lose their office/corporate jobs, or talking about their kids learning to do one of them
Genuine question: What action were you expecting?
I believe that the people in charge don't want to improve working conditions, but in fact want to increase hours, lower pay, and deregulate. So they complain about shortages (without mentioning "of people willing to accept those conditions") and push to lower standards.
And unfortunately they are able to get major media outlets to publish that message without questioning it.
(Also, there was a genuine nursing shortage for a while after Covid, because conditions were so bad a lot of people left the profession. People may still talk about that even though it has resolved now.)
The example at the beginning seems to be a now classic "I have a degree in an area where supply greatly exceeds demand". There is demand, there is supply, but there is a misalignment of qualifications and interests. If "well-qualified people" means fresh graduates in domains with low demand, then the qualification does not matter. In areas like constructions and handymen there is a serious shortage, if not a crisis, in the entire Western Europe. There are jobs, but not the ones most people want.
Too many people go to universities for a degree without checking if there is demand for these degree. Many that I know go to universities just to have a degree, they don't even care what is the domain. I have a childhood friend that is regularly unemployed, he is a historian, but he does not like working in archeological sites and there is not enough need for historians. At the same time we cannot find enough people for construction works, it is hard work and most people don't want it (diversity and equality does not work in such jobs, never did).
I agree for certain fields such as your example but until recently software engineers were in disproportional demand and that has changed pretty dramatically in less time than one would need to get a degree in the field.
Edit: And the example of people working in construction: I know a few. Their companies are booked out for the next 2 years. They, however have shitty pay and disproportionately many work-caused health problems. The owners of those companies are having a good time though.
A 24 year old friend works construction, building and restoring facades and such. Makes 70-80k Euros/year with his own schwarzgeld overtime outside of work. It's on par with a senior SW engineer with 10YOE here. Hard work indeed, but not poorly paid.
It's only poorly paid for unskilled positions in construction that are basically human carrying robots who haven't yet been automated.
There is no such thing as a shortage in labor markets. There is just people not willing to pay the correct price.
Is Germany not enough diverse for you?
It's an anecdotal evidence, but while looking for a job I liked looking up employees on linkedin, then looking up the leadership on company's website. First one would always be much more diverse than the second one
My grandparents had many brothers and sisters each and life was harder back then, but it was easier to raise a large family than today. What changed? Taxes, with direct and indirect effects.
Contraception. Children weren't optional back then, they just happened naturally.
> As of 2024, around 17.4 million people living in Germany, or 20.9% of the population, are first-generation immigrants, while the population with a migrant background in the wider sense stood at approximately 25.2 million, accounting for 30.2% of the total population of 83.5 million
Thats a very misleading statistic
Germans often switch to English when they hear an accent or hesitation
Though I really doubt your anecdotes, I lived in Berlin for years as a non-German speaker, you have a lot of native speakers all around, you often do not notice when you’re not integrated but once you start following native Germans they bring you to groups and places where the language is way more common.
Last time I was in Berlin, I had to pretend to be Finnish to avoid speaking English and practice my German. That guy was a native German speaker. But I came across plenty of people who did not speak good German but were local residents. So I don't disbelieve her. I spent time in Dresden years ago, and it was easy for me to find Germans to speak with (nowadays, I think that may be different as youngsters are all drilled in American English.) Sächsisch is a somewhat strange accent, but at least it is a native dialect. I already know someone else's broken German, I'm not trying to learn their broken German.
I think the time to be in Berlin was the eighties and nineties. Even 1980s era East Berlin appears to have had some appeal (according to East Germans I've interacted with, despite issues with the Stasi.) Outside of the touristy parts, the modern suburbs are fast evolving into just another global city with non-descript glass and steel cylinders filled with junk food outlets and Air BnB. (Not that East German era architecture is that distinctive either.)
Another trick I've learnt sometimes is to drop into a broad Scottish accent so they cannot understand what I am saying in English. But my German is extremely rusty nowadays.
Strangely the wages don’t rise as one would expect.
And companies are picky, they want a perfect fit for their position including the work processes and programs.
Delusional.
Yes, companies are picky, but it is slowly changing. They cannot afford to be picky anymore, but change takes time.
Most historians who work as historians dont work in archeological sites, so I dont see how that part is relevant.
> In areas like constructions and handymen there is a serious shortage, if not a crisis, in the entire Western Europe. There are jobs, but not the ones most people want.
Are salaries going up?
> it is hard work and most people don't want it (diversity and equality does not work in such jobs, never did)
Like, you mean, immigrants wont be accepted if they apply? Cause wherever I was, these low level jobs were exactly the jobs where immigrants went first - they would hire literally almost anyone as they were not picky on language knowledge, cultural knowledge or even skills. All they asked for was time and ability to accept low salary with not too great conditions.
But, if they wont accept immigrants on principle, the inability to find workers is their own problem. Native Germans has obviously more options.
In my case, I did consider becoming a teacher for IT stuff. Not really "IT", as pupils would first learn the basics of course, and the really interesting stuff might not even fit into the curriculum, but I could well imagine teaching what I know and maybe even establishing an extracurricular computer programming club or something. I would feel great passing on my knowledge. But what second subject to teach? ... The only other applicable thing I had in some amount during my studies is ... math. Ugh. You telling me I might have to take additional math lectures, with people who study to become math teachers?! No friggin way man. Also am not a native English speaker, and while I use English every day all day long, I don't think I have the detailed knowledge to teach it responsibly to students, unless they are total beginners, but I won't be teaching IT stuff in primary school, now will I.
If you stick to only one subject, perhaps they will tolerate you, but your salary will forever be a reduced one, even if you work the same hours, just because you only do one subject, and no matter how much of an expert you are.
When it comes to IT/software engineering I don't think there ever was a shortage. Just businesses, implementing big tech hiring processes for their tiny startups and then playing surprised pikachu, that they are "not finding talent".
Aren't those hurdles put in by teachers' unions to ensure they maintain a leverage over their jobs market? Same is for doctors, notaries, etc in a lot of countries.
The intention is to destroy public education in favor of private schools. Same as public health care has been systematically destroyed. It's all part of the neoliberal agenda.
Or take mental health care. We have enough therapists but we don't allow them to work with patients on public health care. We give that license only to a select few ensuring that people wait 6 months to a year if they want to get a therapy spot. Otherwise too many people would get therapy and that would cost money.
The goal is to make rich people richer and ensure they have enough desperate and cheap labor to exploit.
The Russian invasion of Ukraine. The Trump administration actively shrinking the economic cake worldwide. Its active economic and cultural warfare against Europe. Nothing to sneeze at.
Germany and by extension the EU have shown remarkable resilience for now. The question what will happen next should an actual crisis follow. Don't be surprised should Europe further integrate its capital markets and defense to some extent.
The chemical sector hit though feels more self-inflicted by the government that closed down nuclear plants to rely on Russian gas. The annoying part (Nordstream unrelated) is that they didn't see it fit to put a brake on the nuclear decomissioning already in 2014 when Russia invaded Ukraine first.
If they were granted proper work visas with portability then wages would go up. That's why Elon and co love H1Bs.
Well, the thing is, in Europe you generally get something in return for your lower wages: mostly affordable housing, a decent social security system, good healthcare, public transportation, good education, retirement / pension schemes.
In the US, you have to go private for a lot of things: health insurance isn't enough on its own, you need to have a HYSA or otherwise save money for deductibles/out-of-pocket stuff. Good luck if you get unemployed. Public transportation doesn't exist out of a few selected areas, and most of the rest is unsafe to walk or drive with a bicycle, so you need to account for a car and its cost as well. You need to pay for your own education, which in practice means taking on a whole lot of debts. Housing costs are absurd even compared to the most absurdly expensive European cities (London, Frankfurt, Munich et al). And you need to take care of your retirement plans on your own and fund these.
In the end, after you deduct all the American private expenses, as long as you're not working in US tech with its absurdly inflated compensation you're left with the same disposable income but a much, much higher quality of life.
You must be completely out of the current housing market loop, if you think housing in Europe is affordable right now. It's never been any less affordable.
>And you need to take care of your retirement plans on your own and fund these.
Same with Europeans. By the time millenials and younger will retire the public pension systems in Europe will be insolvent. Those without owned housing, assets or private investments are gonna be doomed to poverty and/or homelessness.
I had to flee out of Munich as well, so yes I am fully aware.
But even at current market price: I'm looking for a 2 br apartment in SF. Average for that seems to be 5k a month [1]. In Munich, even in the center that's 2k tops.
> Same with Europeans. By the time millenials and younger will retire the public pension systems in Europe will be insolvent. Those without owned housing, assets or private investments are gonna be doomed to poverty and/or homelessness.
That's the beautiful thing about our pension schemes: they mostly are built without the capital markets! All we need is workers, as long as there are workers and jobs, there will be pensions. And unlike the US, even if it's hardcore cynical, we can always just accept people fleeing from the poverty and wars we and the US have created. We won't run out of people.
[1] https://www.zillow.com/san-francisco-ca/apartments-2-bedroom...
Sounds fine if you wanna be a rentoid cuck your whoe life and retire in poverty/homeless while enriching a landlord.
If you look at buying to own your property instead, Munich square meter is not much cheaper than SF, while wages being much less.
When I was working in Munch, all colleagues were renting shoeboxes while all form our team in Texas(DFW area) were home owners of single family homes. That tells you everything about local purchasing power of housing, since you kept bringing it up. Also, just look at statistics % of homeowners in US vs Germany.
And you don't need to live in super expensive SF or Texas. My ex German boss moved from Bonn to the suburban outskirts of Atlanta, not (just) for the money, but also for the quality of life(his words, not mine) and more advanced healthcare for his autistic kid that far supersede the treatments he got in Germany.
>That's the beautiful thing about our pension schemes: they mostly are built without the capital markets! All we need is workers
Correction: that's the worst part of our pension systems, since it's a local population Ponzi scheme that's unsustainable. The stock market is not perfect but much better, since its extracting wealth from economic activity across the planet, not dependent on the birth rates of your country or populism whims to sway votes from pensioners.
>as long as there are workers and jobs, there will be pensions.
That "as long as" is doing a lot of unrealistic heavy lifting here. Because what happens when a lot of those workers due to the economy go unemployed needing unemployment, or they retire themselves needing more people for old age care and to pay their pensions? Who pays for that? Which whose money? Who pays for the pension system then? You forget that all these issues of the public pension system have been papered over by content debt(money printing) to delay the inevitable collapse. Workers and people are as much liability as they are assets, and EU/Germany has been importing more net-negative liabilities than assets via their open border migration.
Germany has relied on immigration since the 1960s at least. The immigrants won't save them now, as there are too many factors working against that.
-USA can offer higher wages.
-EU members to the east can offer significantly lower taxes for specialists and lower costs of living in some respects.
-As mentioned before, India itself might be facing shortages soon enough.
Personally, I'm not seeing it.
Cannot see this happening anywhere except maybe North Korea.
In my country software engineers can enjoy a tax wedge of 15%, or even 8% if they're lucky enough to have formalities go through.
The tradeoff is virtually no state pension, but nobody believes that it's going to be substantial anyway.
This was enough to keep a huge number of people from emigrating, as western Europe outside of the UK doesn't provide such incentives (quite the opposite, actually).
Poland/Bulgaria?
That's a rare privilege in the EU. Most western EU nations don't allow such legal tax avoidance loophole for workers. It's the exception rather than the rule.
Also worth mentioning 12% income tax in Poland is not for the employment contract, but for business-to-business contract. Add mandatory social contributions and insurance and it will be 20-22%, which is still a good total tax rate.
Surprised?
Stop watching Fox News.
Unions in Germany have less power than in France for instance. The rights to strike are more restrictive
It’s ridiculous to blame unions in Germany where things like political strikes are not allowed … because a former Nazi judge said so.