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Although this thread does not function under the same strict guidelines as the USPMT, it is still a general practice on TL to provide a source with an explanation on why it is relevant and what purpose it adds to the discussion. Failure to do so will result in a mod action. |
i don't have numbers for the amount of people "working poor", but compared to their productivity the german wages are far too low, that's why they have very low demand inside germany and can export their products easily, which in turn hurts the economies of france, spain, italy, greece, etc. in the video i posted it's also said that germany exports unemployment, you can see that in austria (biggest group of immigrants here are germans), another reason why their unemployment rate is low.
the prof explains that the only way to really control inflation in the eurozone is by influencing wages, which need to reflect the productivity of the country, and increase them in a certain rate compared to productivity to create a desired amount of inflation (1.9% in the eurozone is the goal). germany's wages are too low, greece's wages were far too high, french wages are apparently exactly were they should be, but france is struggling because their industry can't compete with the german industry because german wages are far too low.
so the only way is to increase wages in germany or the pressure on the other countries will be too high, since the only alternative for them would be to lower wages themselves to increase their ability to export, yet who is gonna buy the stuff, if everyone exports as much as germany?
the big fallacy is that germany demands, that everyone act like them, when they are on the completely wrong way, but don't see it, because of their ability to export, which they only gained by not playing by the rules of increasing their wages enough for the euro zone's inflation goal.
(look at the graphs starting from 30:00 in the video)
edit: uh, nice, thx for the numbers nibbler 
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What's the point of comparing 'working poor' populations in different countries using relative numbers rather than absolute?
EDIT: Wait, you use a relative measure of 'poor' to compare different countries, but then an absolute measure for the 'amount of working poor' to compare countries with different populations? This makes no sense at all...
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Because you claimed there are fewer 'working poor' people in Germany than in the three other countries.
And if you really wanted to tell me, that 'German poor' is no real poor, because they have a higher income than in Portugal, well then Portuguese poor are 'fakers' as well, since they get easily 10 times the income of Sundanese.
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Do you mean the chart? You select the boxes you want and then hit "next". If it doesn't display, try another browser (it worked for me using Firefox). Unless you mean that it gives you a specific error (like "not available in this country". I doubt you're getting that though  )
On July 20 2015 08:34 warding wrote:
What's the point of comparing 'working poor' populations in different countries using relative numbers rather than absolute?
EDIT: Wait, you use a relative measure of 'poor' to compare different countries, but then an absolute measure for the 'amount of working poor' to compare countries with different populations? This makes no sense at all...
Doesn't it make more sense to use relative numbers (%) rather than absolute? Country X has 5× the population of country Y. Country X has a higher absolute number of unemployed and working poor. What a surprise!!!!!!!!!! (Read: NOT!)
On July 20 2015 07:59 killa_robot wrote:
The real problem with unemployment graphs is that the rate of unemployment is only "People currently searching for work and are unemployed". It completely leaves out everyone not looking for work, or not in the workforce at all, or only working part-time (so not enough to live off of), etc.
It completely misleads you into thinking almost everyone participates in the workforce and can live off of it, which is just flat out untrue.
Completely agree. I do question this use of "below 60% of median wage" used in EC eurostat though. In some countries the median wage could potentially low enough to make them working poor (in theory at least, I have no example at hand), but it can also be high enough so that people would only be in relative poverty once they're at say 45% or lower.
It also depends on the other services available in the country.
Someone at 45% of the median wage in a country with relatively cheap or free public transport, with free or conditional debt systems (see HECS-HELP in Australia) and free or cheap public, decent quality health services (at least for poorer people, and in this example apply to people at that 45% of the median wage) might be just fine.
Go to a country where 45% of their minimum wage buys around the same amount of most goods but where public transport is very limited or expensive and where health services and education are all private and extremely expensive and that 45% of median wage may be an amount you struggle on.
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Fuchsteufelswild that's precisely my point. He's using relative measures of poverty (% of median income) to compare different countries and then going on absolute values on the numbers of working poor populations to compare countries with vastly different populations.
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On July 20 2015 17:22 warding wrote:
Fuchsteufelswild that's precisely my point. He's using relative measures of poverty (% of median income) to compare different countries and then going on absolute values on the numbers of working poor populations to compare countries with vastly different populations.
What are the numbers you used to make your initial claim?
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I've used a raw guesstimate of absolute wages corrected for PP and %s of total population.
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Whatever the graphs may say, ideed Germany has a lot of working poors in a comparable size with other nations, the hartz system was made on that purpose, what could be surprising about? German friends, it's completely pointless to defend your government by saying "we have the poors too!!11" only blinds can think the advantages of the Euro and German egemony are going to the poors to better up their situation.
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yeah, the numbers show that the claim that germans are doing so well is a lie.
Sure, the german economy is doing well because of low wages and the ability to export a lot because of that, but it's on the back of a big chunk of people, even in germany.
And that's why the current economic policy of germany isn't even good for their own population, why should anyone else adopt it?!
Especially if you can't get on the same level of competitiveness in the necessary timeframe to compensate for a lack of domestic consumption with exports.
If you lower wages in greece you just lower the ability of greeks to consume, which hits their domestic economy the hardest since they aren't export-oriented. then greeks are losing jobs because greek industry can safe money by sacking people even if you lower wages, since they can't sell the stuff they'd produce with more workers anyway when their domestic consumption is decreasing.
that's the fundamental flaw in current economic thinking and austerity policy.
And in the end it's a problem of not everyone being able to have higher exports than imports.
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if you stop giving them other's tax payers money they'll have to lower wages, why should other countries pay the highe wages for greece, only so they can consume more?
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On July 20 2015 20:14 unsaeglich wrote:
if you stop giving them other's tax payers money they'll have to lower wages, why should other countries pay the highe wages for greece, only so they can consume more?
they need consumption to create jobs. greek wages were too high compared to their productivity, that's right, that already got remedied.
but german wages are still too low for their productivity, and the cheap german products are hurting the domestic economies of the other EU countries.
everyone has to get their wages to the level which creates the desired inflation goal of 1.9% or you can't have a monetary union. it will break apart if we have 10% inflation in some countries and 1% in germany.
now you can see it from the other side, if everyone stops buying german wares because the euro breaks apart and everybody but germany is devaluating their currency to increase consumption of domestic products and thereby create jobs, then noone is going to buy german products anymore and the germany economy will crash unless they increase wages to increase consumption inside germany, or they find new markets (like the us, TTIP anyone?)
germany is using the euro to be able to export easier, but if germany wants to keep doing that they will have to give others money so the others can buy their stuff.
it's really rather simple.
and it's not only greece.
even france is suffering from a lack of competitiveness compared to germany, because france increased their wages as agreed to have 1,9% inflation and germany didn't.
france will sooner or later have to switch sides politically in the eu and support the southern countries' position.
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On July 20 2015 21:06 Noizhende wrote:Show nested quote +On July 20 2015 20:14 unsaeglich wrote:
if you stop giving them other's tax payers money they'll have to lower wages, why should other countries pay the highe wages for greece, only so they can consume more? they need consumption to create jobs. greek wages were too high compared to their productivity, that's right, that already got remedied. but german wages are still too low for their productivity, and the cheap german products are hurting the domestic economies of the other EU countries. everyone has to get their wages to the level which creates the desired inflation goal of 1.9% or you can't have a monetary union. it will break apart if we have 10% inflation in some countries and 1% in germany. now you can see it from the other side, if everyone stops buying german wares because the euro breaks apart and everybody but germany is devaluating their currency to increase consumption of domestic products and thereby create jobs, then noone is going to buy german products anymore and the germany economy will crash unless they increase wages to increase consumption inside germany, or they find new markets (like the us, TTIP anyone?) germany is using the euro to be able to export easier, but if germany wants to keep doing that they will have to give others money so the others can buy their stuff. it's really rather simple. and it's not only greece. even france is suffering from a lack of competitiveness compared to germany, because france increased their wages as agreed to have 1,9% inflation and germany didn't. france will sooner or later have to switch sides politically in the eu and support the southern countries' position.
Aren't wages a product of supply and demand in EU? Shouldn't employers worry about being profitable and cash-flow positive when they decide to set wages regardless of whether other sovereign nations have poor economic policies?
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is that an EU you want to live in? Supported by German money, buying German products? Only the CEO's of export companies and those lucky who receive cash profit from it.
Not quite the dream of the eu I have..
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On July 20 2015 21:19 Wolfstan wrote:Show nested quote +On July 20 2015 21:06 Noizhende wrote:On July 20 2015 20:14 unsaeglich wrote:
if you stop giving them other's tax payers money they'll have to lower wages, why should other countries pay the highe wages for greece, only so they can consume more? they need consumption to create jobs. greek wages were too high compared to their productivity, that's right, that already got remedied. but german wages are still too low for their productivity, and the cheap german products are hurting the domestic economies of the other EU countries. everyone has to get their wages to the level which creates the desired inflation goal of 1.9% or you can't have a monetary union. it will break apart if we have 10% inflation in some countries and 1% in germany. now you can see it from the other side, if everyone stops buying german wares because the euro breaks apart and everybody but germany is devaluating their currency to increase consumption of domestic products and thereby create jobs, then noone is going to buy german products anymore and the germany economy will crash unless they increase wages to increase consumption inside germany, or they find new markets (like the us, TTIP anyone?) germany is using the euro to be able to export easier, but if germany wants to keep doing that they will have to give others money so the others can buy their stuff. it's really rather simple. and it's not only greece. even france is suffering from a lack of competitiveness compared to germany, because france increased their wages as agreed to have 1,9% inflation and germany didn't. france will sooner or later have to switch sides politically in the eu and support the southern countries' position. Aren't wages a product of supply and demand in EU? Shouldn't employers worry about being profitable and cash-flow positive when they decide to set wages regardless of whether other sovereign nations have poor economic policies?
wages are a product of the union can work out for them. Different countries have different strong unions
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I am willing to move anywhere that is well run and avoids the poor policies of it's neighbors. The laws of reality still apply regarding profitability and cash-flow. A good labour/capital relationship sees maintaining profitability as paramount. But hey what do I know? I am one who isn't too interested in macroeconomics and prefer to see balanced books and balanced budgets. Even though our more economically educated TL'ers know government budgets are not like corporate or household budgets I still am only able to wrap my head around the opinion that they should be.
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On July 20 2015 21:24 unsaeglich wrote:
is that an EU you want to live in? Supported by German money, buying German products? Only the CEO's of export companies and those lucky who receive cash profit from it.
Not quite the dream of the eu I have..
The only time Germany will ever give up its advantage is when the EU absorbs all the sovereign power and dictates fiscal policy itself, although I imagine that policy to be one of increased fiscal consolidation rather than deficit spending.
I find it ironic, or at least more than a bit contradictory that the countries that demand that Germany increase its wages are the same countries who lately have been demanding less EU meddling in countries' internal affairs and economic policy. Additionally, wage evolution in Germany is the result of collective bargaining: government leaves it up to the trade unions and employer's organisations to come to an agreement concerning wages. Neither party would be amused if the government, or god forbid the EU, would suddenly intervene.
Historically, German trade unions have always considered long-term employment more important than fast increases in wages. As a matter of fact, most German trade unions are said to have healthy relationships with the employers. It is one of the more important factors that allowed Germany to keep its industry competitive even with China in the first place.
As an afterthought, I'd argue that increasing German wages will not do much to German spending. Germans are known to be spendthrift. What we'd probably see is an increase in the total amount of money on German savings accounts, regardless of whether the interests rates are low or high.
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you have to put profits back into the system or they are useless.
wages are the only thing right now how you can control inflation in the eu, and that's the problem.
wages are set by employers and unions together, but the unions are not hardline enough right now, at least in germany, because they don't think macroeconomically ofc. if you make policies for only germany and don't care for the rest of the eurozone, the germans were probably right in what they are doing, if you take them out as one secluded example and don't look at how their economy influences the economy of other countries, they are strenghtening their own position, they try to be as competitive as possible.
but if you have the rest of the eu trying to be like germany too, which was basically the goal of the euro, and copying german policies, then thinking germany centered when you make german policies is not enough, you are shooting yourself in the foot longterm, because like i said not everyone can be exportweltmeister at the same time and make profits based on undercutting foreign wages. it just leads to useless competition and lower and lower wages + deflation everywhere if everyone in the eurozone would start undercutting every other countries wages.
and that's what schäuble doesn't get, he cannot have every country in the eu mimicing germany if germany goes for export oriented strategy, because who is going to buy all the stuff?
either germany has to try to get exports/imports ~ 1, then he can demand that everyone do the same as germany, and then the euro is going to work.
or germany puts its profits into programmes to increase consumption in countries who can't compete.
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On July 20 2015 23:03 maartendq wrote:Show nested quote +On July 20 2015 21:24 unsaeglich wrote:
is that an EU you want to live in? Supported by German money, buying German products? Only the CEO's of export companies and those lucky who receive cash profit from it.
Not quite the dream of the eu I have.. The only time Germany will ever give up its advantage is when the EU absorbs all the sovereign power and dictates fiscal policy itself, although I imagine that policy to be one of increased fiscal consolidation rather than deficit spending. I find it ironic, or at least more than a bit contradictory that the countries that demand that Germany increase its wages are the same countries who lately have been demanding less EU meddling in countries' internal affairs and economic policy. Additionally, wage evolution in Germany is the result of collective bargaining: government leaves it up to the trade unions and employer's organisations to come to an agreement concerning wages. Neither party would be amused if the government, or god forbid the EU, would suddenly intervene. Historically, German trade unions have always considered long-term employment more important than fast increases in wages. As a matter of fact, most German trade unions are said to have healthy relationships with the employers. It is one of the more important factors that allowed Germany to keep its industry competitive even with China in the first place. As an afterthought, I'd argue that increasing German wages will not do much to German spending. Germans are known to be spendthrift. What we'd probably see is an increase in the total amount of money on German savings accounts, regardless of whether the interests rates are low or high.
if you increase wages in germany prices for german products would increase, which would force germans to spend exactly what they get more, also their unemployment would increase, so no it's not that good for germany what i suggest, but it's necessary to keep the euro, it's giving the rest of the eu the opportunity to stay competitive without indebting themselves.
well of course one problem would be that maybe the total production of goods is too high. if you produce more than you can consume in a closed system, you will create unemployment too, so maybe we should start changing our view completely and use increased productivity to lower working hours instead of producing more goods, which noone is going to consume anyway...
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if you increase wages in germany prices for german products would increase, which would force germans to spend exactly what they get more, also their unemployment would increase, so no it's not that good for germany what i suggest, but it's necessary to keep the euro, it's giving the rest of the eu the opportunity to stay competitive without indebting themselves.
well of course one problem would be that maybe the total production of goods is too high. if you produce more than you can consume in a closed system, you will create unemployment too, so maybe we should start changing our view completely and use increased productivity to lower working hours instead of producing more goods, which noone is going to consume anyway...
That is exactly what needs to happen in the developed world. The best way to do this would be to have overtime legislated at 32 hours.
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EPT
