The deindustrialization of Germany

https://www.politico.eu/article/rust-belt-on-the-rhine-the-deindustrialization-of-germany/

by flashfaffe2 • 3 years ago

100 143 3 years ago

whinvik• 3 years ago

Nearly 20 years ago, Germany overcame its reputation as the “sick man of Europe” with a package of ambitious labor market reforms

Does anyone know what those were?

Dunedan• 3 years ago

That's a reference to the so-called "Agenda 2010": https://en.wikipedia.org/wiki/Agenda_2010

nieksand• 3 years ago

https://www.imf.org/external/pubs/ft/wp/2015/wp15162.pdf

"In 2003–05, Germany undertook extensive labor market reforms which were followed by a large and persistent decline in unemployment. Key elements of the reforms were a drastic cut in benefits for the long-term unemployed and tighter job search and acceptance obligations."

ahartmetz• 3 years ago

Also working poor.

WastingMyTime894• 3 years ago

The Hartz reforms are fairly famous, yes. It’s mostly social dumping. Forced contraction of actual wages through reform of the benefits plans.

It’s important to note that they are overall poor reforms and should have been nullified by the German money value shifting due to the knock off effect on the saving rate. This didn’t happen because they were put in place at the same time as the Euro and the overall imbalance in the union allowed Germany to keep an undervalued currency. In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since.

lo_zamoyski• 3 years ago

In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since.

Those who like to bully the poorer members of the Union on the grounds that they're being bankrolled by the the wealthier states would be wise to take note of this, and take a more intelligent and informed view of EU "subsidies". The idea that the wealthier member states are showering these countries with funds out of the disinterested goodness of their hearts is not only ignorant of how these cash flows actually work in the grander scheme of the movement of money, but also preposterously naive.

The power balance is shifting in Europe against this crypto-germanocentrism, however.

oezi2• 3 years ago

Why should the reforms be nullified by a change in saving rates?

Hartz IV reforms pushed unemployed people back to work by reducing long term unemployment benefits to 400 EUR + rent. This certainly reduced purchasing power first (by reducing available money) but also quickly freed up social spending as employment rates soared.

imtringued2• 3 years ago

The strategy Germany is following is to cut unit labor costs below Greece aka Germany is competing on price with Eastern European countries. This may get you the "Exportweltmeister" trophy but is is just that, a trophy. It doesn't actually benefit you that much.

fwungy• 3 years ago

It's all so tiresome.

WastingMyTime894• 3 years ago

And obviously the reason is the lack of labour reform and not the billions in handouts currently given by the US and China which the EU refuses to match because of its brain dead insistence on undistorted markets and fiscal rigour. Ah Politico, such well researched and reasonable journalism, it warms my heart…

sauercrowd• 3 years ago

what are you referring to with "billions of handouts"?

WastingMyTime894• 3 years ago

The Inflation Reduction Act in the USA and the equivalent measures which have been taken in China but don’t have a catchy name. Both countries are currently giving subsidies to companies at an unprecedented rate.

amadeuspagel• 3 years ago

Why aren't other EU countries facing the same problems? Also, from the article:

BASF opened a plant near Dresden that makes cathode materials for electric-car batteries just two weeks ago and has pledged to keep investing in its home market. To secure such commitments, however, local and federal governments have been forced to offer generous incentives. BASF will receive €175 million in government support for its new battery operation, for example.
Similarly, in June, the U.S. chipmaker Intel secured an eye-watering €10 billion subsidy for a massive new factory in the eastern city of Magdeburg. That translates into €3.3 million for each of the 3,000 jobs the company has pledged to create.

LudwigNagasena• 3 years ago

because its brain dead insistence on undistorted markets and fiscal rigour

The issue lies in the fact that the EU is comprised of numerous countries within a single market. When one nation begins to subsidize a company or an entire sector, the other nations are left powerless, merely watching their own companies struggle to compete against those bolstered by government subsidies. It becomes a game of pouring government money down the drain and destroying any semblance of free market mechanisms.

Atropos• 3 years ago

You should check out how EU state aid laws work. This is exactly the issue they are addressing and it is not true that we have seen a significant "subsidy race" between different EU countries in the recent past.

jcfrei• 3 years ago

The US is attracting so many companies currently because they are giving out the largest government subsidies. It's nice that you're advocating for more free markets but governments are moving in another direction. And either a country can match those subsidies or they will see their industry relocate to another one.

renewiltord• 3 years ago

Nothing about European markets is undistorted. The most distorted of all is the view that Europe is declining out of some moral stance. The classic example is how California and the US had to go clean up Volkswagen because local regulatory authorities weren't up to snuff.

ROTMetro• 3 years ago

Is this the same Germany that last I know allowed bribes and kickbacks on international sales to be tax deductible? We lost so many contracts because the things the Germans did were illegal for a USA company.

https://www.bloomberg.com/news/articles/1995-08-06/germany-w...

I have the typical American of German descent hate for Germany because they threw my family away but now are open for everyone else to come live there (making it a huge 'fuck you and your family specifically love Germany'), but also how truly horrible they behave when it comes to business.

oska2• 3 years ago

I have the typical American of German descent hate for Germany because they threw my family away

I've never seen this sentiment expressed before (but I'm neither of German descent nor US American). Care to expand further ?

huijzer2• 3 years ago

I have tried to go against some of the arguments because some are wrong, some are okayish, and some are just plain wrong, but I gave up. The article moves all over the place pulling random facts from all kinds of places in support of the idea that Germany is declining. Maybe that's true, maybe not. This article appears not rigorous enough to come to a right conclusion.

Michelangelo11• 3 years ago

Right, I have the same impression -- it's really all over the place.

Anyway, the absolute key issue seems to be energy costs. If they hadn't skyrocketed, this wouldn't be happening.

nradov4• 3 years ago

Not just energy but specifically access to natural gas. Even when not burned for power and heat it acts as an essential feedstock for much of the German chemicals industry. With flows from Russia being reduced or eliminated there is no choice but to relocate production.

polytely• 3 years ago

Honestly, I've never seen a good article from Politico eu.

haizhung• 3 years ago

Politico is owned by Axel Springer, which is the German equivalent of Fox News, if that explains it.

HackOfAllTrades2• 3 years ago

Same here. It reads like a huge list of cherry-pickings.

You'd think that quoting facts would strengthen ones argument, all these tiny and sometimes very specific facts with no context had the opposite effect.

still_grokking2• 3 years ago

The article was obviously about the big picture.

You get that only when you look at a bunch of "unrelated", "small" facts. If there are a lot of facts pointing in one direction, maybe there is something to it.

The other point is: That was not cheery picking. There are no other facts that would point in the opposite direction… More or less everything in Germany is in decline. That's just true. Source: I'm living here since about 40 years.

Though the article interpreted something quite wrong in the very beginning: The decline started quite exactly around 20 years ago. It was caused by the move to ultra-capitalism (the mentioned big social reforms 20 years ago), which made Germany a low wage country, which made the people poor and started an exodus of the well educated parts of society. The reforms made some of the numbers capitalists are interested in look good for some time, but at the expense of maximally "squeezing out" society. Now this short sighted tactic backfires.

By now almost 1/6 of the people here are poor (and 1/4 is at risk of becoming poor):

https://www.malteser.de/armut-in-deutschland.html

Almost nobody can afford children. ("Bio-Germans" are foreseeable dying out therefore, and it doesn't look like this is avoidable any more when you try to play the numbers game. The article showed the relevant statistic. At least we get some migrants; with children. But the "Bio-Germans" hate migrants. Also this may pay off not before one generation; we need to educate the children; but the education system is broken…)

Actually it's getting hard to even afford a living place. Liberal housing markets made space in areas of high population density so expensive "normal" people can't afford it any more. At the same time building new housing is too expensive and nobody invest in that. Which made companies in the building business die out, and even if the state would massively invest in housing right now we don't have the capacity to build that stuff. And even if we would have the firms, they would not find employees…

https://www.mieterbund.de/fileadmin/public/Studien/Studie_-_...

(Fun fact: AFAIK if Germany would build enough housing it would completely miss it's green goals, as building housing creates a lot of CO₂.)

The complete dependence on the car industry becomes a real problem at the same time. It's not only the big car manufacturers. But the largest part of "the Mittelstand" are external suppliers for the car industry… Should this implode (and it looks like that, as China is flooding the car markets, that's a fact) this will have catastrophic results for Germany. We simply don't have anything besides the car stuff. All we've got is already gone. And what's left is leaving because of he astronomical energy prices.

Big players are moving elsewhere, the smaller ones just die. Result: More people becoming poor, which just accelerates the downward spiral.

In regard to modern tech, like IT, Germany is a developing country. We're completely depended on the US and Asia in this area! People are making jokes about "Russian computers"[1] but the sad truth is we couldn't even build such a thing on our own.

In the last decades the education became completely messed up also. They tried to make everybody go to university; which destroyed the previously high class educational system. By now even the firms offering apprenticeship in handicraft trades complain that you can't find people skilled for that as the people coming from school can't properly read, write, or do basic calculus. (Source: I've talked to people offering apprenticeships, not only once, and I've had some contact to the youth.)

At the same time politics try to just close their eyes to most problems: If you listen to the local propaganda "everything is good" or, currently, "It's Putin's fault!". (That's not completely true, of course, there is some critical thinking even in mainstream here and there, but they hide it usually under a really large pile of straight propaganda; and it became quite seldom. This wasn't always like that. Even the state media was much more critical 20 years ago. By now it's obviously just coordinated propaganda. We actually pay over 10 billion Euro for our state propaganda…)

The article was actually refreshing unpolitical. You usually don't see such "pure" recitation of facts in the local (and especially state) media. (I was waiting the whole time while reading when we "get to the meat" and I get informed what we should buy to safe our souls, or who to blame for all the problems, but to my surprise this part never surfaced. The article looked almost like proper journalism from decades ago).

Just naming those facts is actually considered "right wing activism" here in Germany. You will get canceled quite instantly for saying the things the article said if you state such stuff for example as comment in some of the mainstream media outlets. Yes, they cancel for reciting facts. Especially if the recited facts have potential to "irritate people", and you present some proper numbers to make your point.

(Disclaimer: I'm not supporting any political party any more. I was once "leaning to the left". But the lefties are by now the same scammers as every other political movement. All these people in politics just care about redirecting state money into their own pockets. No difference the "color" or "side" of the political movement. Kleptocracy in it's final stage. Peak capitalism. This won't end good… And if there wouldn't be the language barrier I would actually start to consider to move to China. It's getting noticeably worse here and while looking at the current state of affairs it foreseeably won't get better during my lifetime anymore.)

[1] https://www.heise.de/news/MIG-Akinak-Russlands-selbstentworf... (See also the comments!)

tvon_g• 3 years ago

It's directionally correct though, no? What's the case to be made that Germany is ascending? The fact that most German billionaires inherited their wealth is pretty telling I think.

Archelaos3• 3 years ago

It shows that inheritance tax in Germany is too low and that unfortunately there is no longer a wealth tax.

2-718-281-828• 3 years ago

how many planets are there, mr dice?

[rolls dice - dice gives a 6]

unbelievable ... not 3, not 15, but 6 - that's remarkably close to 8!

you're some smart dice, aren't you!

ttepasse2• 3 years ago

Since 2015 I can’t remember Matthew Karnitschnig writing a neutral or even positive article on Germany. The sky is always immediately falling. Back then it was of course the refugee crisis and other assorted culture war nonsense, but now he seems to be retooling.

ehvatum• 3 years ago

I feel embarrassed for Germany. So much pride, built on dishonesty and exploitation of customers and other EU nations. Getting to the point of implementing meaningful reform will be tremendously ugly, in a country that derives such gratification from exporting carbon-intensive industry to China. Sad.

photochemsyn• 3 years ago

The article mentions 'high energy prices' and 'energy costs' and alludes to 'Kremlin cutting off natural gas supplies' but otherwise provides zero discussion of the overall energy picture in Europe. A couple of major issues they could have addressed:

1. In retrospect, was the German decision to eliminate nuclear power wise? Could they have squeezed another decade of power out of their existing plants, even if they didn't see that as a viable long-term energy source (having to import uranium fuel is not all that better from having to import natural gas, economically speaking)? Granted, nuclear only provides electricty, while BASF needs methane.

2. Russian gas exports to Germany have been replaced by US LNG gas exports, but the cost differential is pretty huge. Looking around, I see this site has discussed it before (Nov 2022):

https://www.politico.eu/article/cheap-us-gas-cost-fortune-eu...

That's an interesting article, pointing to tight markets being taken advantage of by European energy traders (though Exxon and Chevron shares are up 50% since the price boom, Permian Basin development, booming LNG exports, etc.). It also might explain why some European interests see a finacial benefit in prolonging the Ukraine war (i.e. keeping Russian gas sanctions in place).

3. Somewhat amusingly, if BASF moves a lot of production China, then their natural gas feedstocks will be coming from... Russia's massive Sakahalin 1 & 2 projects (built with extensive help from Exxon and Shell respectively, and ironically)?

https://www.reuters.com/business/energy/russias-sakhalin-inv...

Maybe blowing up the Nordstream pipeline wasn't such a smart move, after all.

CamperBob2• 3 years ago

Maybe blowing up the Nordstream pipeline wasn't such a smart move, after all.

Do we know with any degree of certainty who was actually responsible for sabotaging the pipeline?

oezi2• 3 years ago

It seems all evidence points to a Ukrainian op performed by a small team and minimal amounts of explosives.

Ukraine is also the only country which had clear motive and no real repercussions if found out (because already at war with Russia).

tdrz2• 3 years ago

1. In retrospect, was the German decision to eliminate nuclear power wise?

"The country’s Green transformation, the so-called Energiewende, has only made matters worse. Just as it was losing access to Russian gas, the country switched off all nuclear power."

Maybe blowing up the Nordstream pipeline wasn't such a smart move, after all.

Or maybe relying so much on a partner which others have warned you about was actually the not so smart move.

choeger2• 3 years ago

Germany is extremely well positioned to rise again economically in the next five years or so. It's attracting migrants from all over Europe, it's located quite nicely in the middle of the continent and it's currently building a massive capacity of renewable energy.

The only real problem right now is efficiency of spending. Nearly all public sectors (defense, housing, transportation, education, healthcare) bemoan significant lack of financing and workers. Yet, Germany spends enormous amounts of money and employs record levels of workers there. It's like all the money and workers just vanish. This leads to the situation that it's currently difficult to hire in Germany.

This process leads to the attraction of skilled workers especially from eastern Europe. I don't know where this ends, but I doubt the spending and employment will get significantly more efficient. Instead, Germany might very well attract additional millions of well-educated Poles, Ukrainians, Romanians, etc.

I wouldn't be surprised if by 2030 we see a Germany with a population of 90M people absolutely dominating the European market.

eldaisfish• 3 years ago

i would not be so hopeful. A big problem is that germany does not operate in the global lingua franca - English. This really shows when countries like Australia and Canada - combined, both have a population less than germany’s - are able to attract the best and brightest from around the world.

Another problem is one that plagues all old world countries - societies are based around ethnicity.

These combine to mean that Germany and the EU in general are not attracting the best from abroad. The region is often the second or third choice of the educated migrant. Don’t believe me - look at the EU’s own internal migration numbers and the stats for immigrants from outside the EU. Internal EU migration is pretty low relative to countries like US (states vs countries, sure) and the immigrations from outside are largely poorly educated.

This shows in Germany’s immigration policy - they have been reducing barriers to entry for over a decade now and are yet struggling to hire foreign talent. This begs the question - why?

holoduke• 3 years ago

Eastern European people are very much german orientated. Most speak better German than English. So no you are not right. Germany is immensively popular by tech migrants from Russia. Poland, Hungary, Czech etc.

FirmwareBurner16• 3 years ago

These combine to mean that Germany and the EU in general are not attracting the best from abroad.

How many skilled Eastern Europeans have you met who still want to move to Germany? This was the dream ~10 years ago but most white collar EE engineers I know take one look at the wages and housing situation there and make a 180 back home.

radiator2• 3 years ago

Since when is it a problem for a country to operate in its own language? Especially one which is spoken by 100 million people? Have you considered that people who migrate to a new country for work might even try to learn the language? Who says English must remain lingua franca in Europe?

But beside all that, everyone with a basic education in Germany does speak good English if needed.

nicbou4• 3 years ago

I help German immigrants for a living. It's currently one of the hardest countries to settle in due to the archaic and labyrinthine bureaucracy. Berlin's immigration office is completely unable to handle its workload, delaying immigration to the point people just give up and leave.

I've been here long enough to apply for citizenship, but Berlin has a backlog of 26,000 applications and literally refuses new ones until they centralise the processing. The new central office is expected to handle 20,000 applications per year.

This is the city where you need an in-person appointment weeks in the future to register your address, a key process that many other things depend on.

All of this can only be done in German, of course.

If Germany wants to attract talent, it has to meet it in the 21st century.

FirmwareBurner16• 3 years ago

Maybe Berlin has just reached maximum occupancy? I mean, we'd all like to live in our favorite dream city, but how long is that sustainable long term, if we all move to one city?

Germany seems like it wants to have its cake and eat it too. It wants more migration to put downward pressure on wages and upward pressure on housing prices, but that's it, it does nothing to actually make life pleasant and attractive for the people moving there to live and work, in terms of taxes, bureaucracy and housing, so you just feel like cattle, exploited for your ability to pay taxes to the state and to pay someone else's mortgage.

brazzy• 3 years ago

Berlin is infamously badly governed. It should not be considered representative of Germany as a whole.

sparrc• 3 years ago

Opposite lots of commenters here deriding the article as "all over the place", I thought it was very well-written and comprehensive. Seems like there are concerns across a wide swath of companies and industries in Germany.

Reading between the lines, the proposed solution seems something like lower corporate taxes (currently making decamping to Dublin more attractive) and lower energy prices.

The risk brought up is that if things continue it will likely lead to increasing blaming of immigrants and a rise in the far-right AfD party, which has already started.

lyu07282• 3 years ago

Also gutting labor rights, but I suppose that's always suggested by liberals no matter what

tasubotadas2• 3 years ago

What about employer rights? Right to fire poorly performing schmucks?

tasubotadas2• 3 years ago

Yes. The worst is yet to come.

- Germany is heavily reliant on industry (like Autos)

- Cheap energy has ended due to war in Ukraine

- The available replacements are going to be even more expensive (and they are still closing more nuclear plants)

- The production costs will increase reducing their competitiveness even further

- The competitives was bad even before this (VW vs Tesla anyone?)

- Once the huge layoffs and closures will begin, the entire economy will enter recession.

Industry-focuses businesses are now low-margin and high-competition (competition mostly coming from Asia). The same is happening here what happened during the shift of Agriculture economy into Industrial economy.

And the shift to services (tech/software specifically) was pretty much non-existent. Also, it's unlikely to become any better due to alienation of investors (who wants to invest in a country where everybody is taxed and red-taped into oblivion?).

So... who nows. Germany is probably going to pull a "Greece" on us :).

patall2• 3 years ago

- Cheap energy has ended due to war in Ukraine

While there is some truth to that, energy prices are lower than at the start of the war.

- The available replacements are going to be even more expensive (and they are still closing more nuclear plants)

There are no nuclear plants left. And Germany just got 12.6 billion from auctioning of building rights for 4 new wind parks (with capped price limits of 6.3ct/kW/h.

- The competitives was bad even before this (VW vs Tesla anyone?)

How is that? VW has a quite broad electric car range by now. Tesla is hip (which VW also tries to be) but that's about it

- Once the huge layoffs and closures will begin, the entire economy will enter recession

The german labour market is quite strong (except maybe construction, but there's not many germans working there anyways). Problem is rather that too many people are retiring (and that the average age is so high)

So... who nows. Germany is probably going to pull a "Greece" on us :).

The budget of the german state is almost balanced. How does it look in the US?

javajosh• 3 years ago

In addition to this general malaise, the EU Cyber Resilience Act (CRA) is going to have a big, negative impact on all of the EU, especially Germany, and especially the software industry. The CRA itself is insane, requiring, for example, that conforming software phone-home. Which is, of course, the opposite of what we should be pushing for. Note that something similar is probably coming to the US in the next few years.

I learned about this today from Eclipse Foundation executive director Mike Milinkovich's excellent video/tutorial/warning on the subject: https://www.youtube.com/watch?v=AmsM5_5QO5A

Vuizur• 3 years ago

When you look at open source AI, for example, EU laws are a huge problem: Not only the act you mentioned, but also GDPR, where it is not clear so far how the "right to be informed" or the "right to deletion" can/must conceivably be implemented. (From my interpretation I also don't see how OpenAI can conform to the "right to be informed" without publishing its training data).

And of course the AI act, which might make it possible for the publishers of open models to be sued if a third party misuses it: https://techcrunch.com/2022/09/06/the-eus-ai-act-could-have-...

HackOfAllTrades2• 3 years ago

I'm terribly suspicious when an article quotes a CEO saying "profits aren't where they should be".

God only knows what he thinks his corporate profits "should be", but I'd bet it's a lot higher that you or I would guess.

novaRom• 3 years ago

quote: Germany ranks only eighth in the Global Innovation Index

Is it so bad? For 83 millions people economy.

nicbou4• 3 years ago

According to law only mailed or faxed responses are allowed

woobar• 3 years ago

Considering that Switzerland is No. 1, Sweden, Netherlands or Singapore are all above Germany, I'd guess population is not a big factor in computing this index.

morelisp• 3 years ago

Switzerland is No. 1

Time to rename the region CHAD I guess.

tdrz2• 3 years ago

I found the article quite good but has missed a couple of points that need to be mentioned:

1. The attitude of the average German consumer

It seems to me that one of the national sports in Germany is to find cheaper deals for pretty much anything (and then brag about it). Even if it's fractions of a euro! After trimming down on everything that they could, the manufacturers and service providers had to finally reduce quality. This happened to such an extent that the famous "Made in Germany" is now meaningless, if not worse.

2. The attitude of the average German manager

"I am your boss, you are the employee, now shut up and do as I say" attitude does not work well in knowledge-based industries like Software. And I believe this is one of the reasons why Germany is behind in digitalization, let alone in digital innovation.

patall2• 3 years ago

I am your boss, you are the employee, now shut up and do as I say

This would also not work in engineering and never did. In fact, it's likely one of reasons why german engineering was so good: because people would (and still do) tell their boss bluntly what is wrong.

tetris112• 3 years ago

Can confirm this in science too. German masters/PhD students are much more willing to correct the professor on a topic, then I. England. N=1, of course.

croisillon• 3 years ago

haha number 1! 20 years later i'm still traumatized about my boss who would spend the whole lunchtime speaking about gas prices

aeyes• 3 years ago

1. Made in Germany for consumer products might be worth less today but the export of industrial supplies like machines, chemicals and materials are much more important to the economy as a whole. Outside of Germany it is still quite respected - to the point where foreign companies give themselves and their products German sounding names while slapping German flags on their boxes to sell more.

2. Why software Made in Germany doesn't work well has a number of reasons but I'd say that it is primarily because it is much harder to raise capital for things that only might work 1 out of 50 times. People who start businesses are much more risk-averse and most try to be profitable or self-financed from year 1. This makes them uncompetitive in innovative sectors.

alephnerd6• 3 years ago

1. You are correct that German industrial exports are highly respected. The issue is manufacturers in other countries (eg. Poland, Czechia, Hungary, Türkiye, China, Romania, Spain, Mexico) have caught up. And oftentimes those manufacturers are themselves German companies. This has in turn commodified a major portion of the German industrial base.

2. France has a similarly ossified financial culture, but has a much more robust tech industry compared to Germany (eg. Ubisoft, Datadog, Capgemeni, Dassault Systemes, Dataiku, Alcatel-Lucent, Thales, Orange, etc)

Germany has a strong base, but some reform is absolutely needed to upskill their economy.

codethief• 3 years ago

Could you provide some references that back up your claims?

dontupvoteme2• 3 years ago

This happened to such an extent that the famous "Made in Germany" is now meaningless, if not worse.

This was originally an anglo pejorative meant to denigrate the quality of German goods. Mild irony.

2. The attitude of the average German manager
"I am your boss, you are the employee, now shut up and do as I say" attitude does not work well in knowledge-based industries like Software. And I believe this is one of the reasons why Germany is behind in digitalization, let alone in digital innovation.

My experience has been the complete opposite.

mmarq5• 3 years ago

I don’t have an informed opinion, but with my limited interactions with Germans, the problem with software engineering is that it is not considered a high status profession. The smart German would rather go into law, medicine, accounting (!!) or teaching, than into software development. It is true that before Brexit salaries were much lower compared to the UK, and that only recently, after Covid, they skyrocketed. So this perception may have changed for the younger generations.

Mind, this is my poor man’s sociologist analysis, but it seems that they rely heavily on foreigners, which are very hard to attract because of the language and bureaucratic barrier. From what I see, even companies that pay good salaries (say ~100K total compensation for a senior) mainly employ foreigners.

FirmwareBurner16• 3 years ago

It is true that before Brexit salaries were much lower compared to the UK

And people from the UK say the opposite, that engineers are not respected and paid in the UK the way they are in Germany. I think the low/high PoV of your salary depends in which bubble you hang around. Every market is flooded with low pay offers, but yes, I feel like in Germany, unless you work for big-tech, SW engineering is pay way less compared to other positions, in contrast to the US where tech wages rule over the rest.

only recently, after Covid, they skyrocketed

I don't think you're correct, maybe that was true at the height of the market a year or so before, but recently after the tech market fell and layoffs happened, I see most companies rarely hire and when they do they exclusively want skilled seniors for mid-level pay. I don't see those skyrocket salaries anymore after the market collapsed.

Same info I got when I talk to people who recruit/hire: a year or so ago they were struggling to hire and had to increase pay or hire juniors and train them, but now they get a tone of experienced applicants for every opening that they can dictate pay.

9dev• 3 years ago

"I am your boss, you are the employee, now shut up and do as I say"

I don’t mean to be disrespectful in any way, but (there’s always a but after that opening) if that’s you’re experience working in Germany, I’m afraid you’re either ignorant of culture in other countries, or not working in a job with a lot of impact, or responsibility. The German work culture is distinctly the opposite, namely people being blunt in what they say and brutally honest with their superiors.

kachurovskiy• 3 years ago

We're definitely huge fans of paperwork here and it hurts a lot.

Want to sell something? Company registration takes months, just getting a business tax ID was 6 weeks for me. To sell electronics, register with Stiftung EAR, then find an intermediary to get you a WEEE-Nummer and report monthly (!) sales figures of all your device types. Just that registration costs 1k and 8 weeks. And don't forget your battery and packaging license!

By comparison, similar WEEE fees in UK are 30 pounds and in Estonia are 12 euros, no wait.

But the real fun starts if you hire someone :) The paperwork there is a magnitude more.

I don't think we're doomed though. The schools are packed with kids, education is free and good, health services are not a concern (looking at you, US), society is healthy. I think we'll manage :) Hopefully no more self-inflicted energy crises in the works.

jareklupinski• 3 years ago

We're definitely huge fans of paperwork here and it hurts a lot.
society is healthy

no pain, no gain :)

there's probably a terry prachett quote attributing bureaucracy to the stability of a large-scale civilization

tetris112• 3 years ago

It has a nice, horrifically frustrating, but nice way of slowing things right down. Its inefficiency is one of it's perks in my opinion. It buys people time to think before a piece of legislation is enacted, and when it finally is, people are already over it.

fxtentacle• 3 years ago

"But the real fun starts if you hire someone :) The paperwork there is a magnitude more."

I've been very happy with Sage, an online SaaS to manage employees and their payments, taxes, and related paperwork.

aktenlage• 3 years ago

Keep in mind that politico is a subsidiary of Axel Springer, which is largely controlled by a man that has recently been exposed to have actively ordered chief editors write in support of the party of economic liberalism (FDP) before the last election in Germany. I.e. it is entirely possible that this article is also politically motivated.

alephnerd6• 3 years ago

I keep seeing people saying this about Politico and it's total FUD. I have friends who work there and it's pretty firewalled from Axel Springer. This conspiracy theory for the Politico portion seems to have started in r/Europe and r/WorldNews a couple months ago and kept getting repeated since.

kataklasm• 3 years ago

And you are plastering this exact message all over these threads here. Makes it seem like you have an agenda? Do you have an affiliation with Politico/Axel Springer?

The political corruption and and election meddling done by Axel Springer is a known fact. [0]

Excerpt from [0] translated with DeepL:

  "Our last hope is the FDP. Only if it becomes very strong - and that may be - the green-red disaster will be avoided. Can we do any more for them. The only ones who are consistently positioned against the Corona Measures madness. It's a patriotic duty."

[0] https://archive.is/g8RMu

SV_BubbleTime• 3 years ago

If you are reading any news site about it - it’s political to someone.

dontupvoteme2• 3 years ago

It took them over 100 years but finally the treaty of versailles will be implemented, for all the wrong reasons.

MichaelMoser123• 3 years ago

There is a similar recent article in German from the "Berliner Zeitung"

https://www.berliner-zeitung.de/wirtschaft-verantwortung/dei...

The linked article is mentioning additional factors:

  - tax incentives and favorable legislation offered in the US and China.
  - drawn out planning and approval procedures in Germany
  - no more cheap natural gas from Russia (i guess that was a big hit for the chemical industry)
  - cheaper energy (also cheaper green energy) in the US and China.

However just last year Tesla opened a big plant in Brandenburg, near Berlin, go figure... https://en.wikipedia.org/wiki/Gigafactory_Berlin-Brandenburg

... and Intel is building one big fab in Magdeburg - that one is costing 17 billion euro: https://www.intel.com/content/www/us/en/corporate-responsibi...

So maybe not all of industry is leaving.

The deindustrialization of Germany

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