Germany's Unexpected Economic Crisis
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- čas přidán 4. 06. 2024
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"Made in Germany" carries with ti a kind of prestige, and a marker of quality. Germany is famous for it's incredible engineering and manufacturing talent, but more and more this is becoming a thing of the past as overseas manufacturers start to build up their centres, and can produce on a scale that Germany just can't keep up with. Is this crisis going to end German manufacturing?
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Hope the next video is good.
Your language table states that russian is spoken by 108 million, which is at least twice as low: Russia is 140~ million, plus Ukraine is about 30-40, Belarus ~8, Baltic states ~5, central Asia is about 50 million, but about 40 percent would speak russian freely, not to mention several million people who migrated ex USSR, that would mean there are at least 250 million people who can at least hold a basic conversation in russian
Love your videos!💚
Man the word 'crisis' has lost all meaning these days...😒
Only someone who thinks Krugman is worth listening to would consider this unexpected.
As a German there is nothing "Unexpected" about this.
Dann wohl wir mal hoffen dass du keine Ampel Partei gewählt hast.
When did you kown
@@WojaksWorld Noch nie.
@@kingjahad100 10 years?
@@WojaksWorld gut das Merkels Versagen beim vernünftigen Infrastruktur-Ausbau der Hauptgrund für die Krise ist.
"I shot myself in the kneecaps, the fact I can no longer walk is completely unexpected."
looooooool
That’s a nice sound bite but how exactly did Germany shoot itself in the kneecaps? Short of the rest of the world suddenly deciding German is a language worth learning, Germany is going to have to make peace with the fact that it is and it will continue to go through the same economic aging process that all other industrially advanced societies have gone through.
@@mensrea1251 Off the top of my head, caving to the "nuclear power bad" crowd at the worst possible time to do so. Now, it's in the very awkward situation of requiring Russian gas while actively being against them over Ukraine.
@@mensrea1251 well for energy, the rest of europe builds nuclear and germany shuts them down, alot of europe still buys cheap gas from russia only germany dosnt wich hurts alot of industrys that depend on gas, you might be able to smelt steel with electricity but you cant create chemicals out of some electrons...and erverytime someone says bureaucracy is too high, there is a new regulation and various extra pages of forms to fill out...
@@mensrea1251Despite knowing of societal problems such as the age population over the last 20 years Germany has invested less and less into its future. Disastrous privatizations have crippled vital infrastructure such as rail and telecommunications. Lack of funding has led to sectors such as retirement homes and schools being extremely short staffed, in a time where aging schools lag behind the modern era and retirement homes are over ran. This is all overshadowed by incomprehensible bureaucracy blocking nearly everything.. Germany seems to have just given up its will to live, perhaps because they’re are too many old people with a foot in the grave stagnating with thoughts of “es war immer so, wird immer so sein” instead of investing in the future.
As a German I’d say that most of our problems (demographics, lack of digitalization, military, bureaucracy, immigration) are known for years. Unfortunately our politicians are only interested in themselves and the next year election instead of proactively tackling major problems that pay off mid and long term…
They increased their own salary by 1.400€ per month while everyone else in the country is suffering more every year. They just don't care.
Germany has now become the world's third-largest economy. Behind the USA and China, which they have much more inhabitants.
@@anna-5104always the problem when you give someone the sole power to reward themselves
As a UK person I can tell you that problem sounds very familiar.
@@CloudWalkBetayeah nobody likes or wants to be the wet blanket when everyone else has fooled themselves into thinking the party will last forever
I am an Senior R&D Project manager for a German multinational. I can tell first hand that bureaucratic red tape is forcing us to relocate most of our business. Most of the regulations on chemical business are so strict that it is no longer possible to do innovation, let alone set up production, in several key areas. If saving the environment is the goal it is self defeating: you make regulations so strict that companies are relocated just across the boarder, with externalities coming right back. Or even worse, relocate in countries with no regulations at all, making it worse for the environment as a whole. When, in think-tanks you try to explain this, you are met by a bunch of jurists that lack the basic technical understanding in the fields they are regulating upon.
This is just the start. Complying with bureaucratic requirements starts to cost more than the rest of the development process combined, without any real tangible benefit for the consumer, safety and the environment. Having this coming from parties that then caused Germany to increase reliance on coal because of an irrational fear of nuclear is, to put it mildly, infuriating.
There is nothing more efficient at killing the German industry than German regulations.
Almost like it was a good idea to have gotten out of europe a few generations ago.
lng x 10 real price has NOTHING to do.........
You are just viewing it the wrong way..
Its good we think about the enviorment.. Where would be be today if we were not? Could not swim in any lakes. Eating fish would be a big nono.
What EU needs to do, is protect is markets better. Like chemical industry, but tariffs so high that the chinese chemicals struggle to compete.
EU should aim to make their market globe spanning, so everyone plays under the same rules.
The world economic forum is ruining Germany and every other European country that is bowing down to them.
@@MrDanisve I think you did not read my post carefully. Nowhere did I write that some degree of regulation is unwanted. What I did write is that regulations so strict that they cannot possibly be implemented will cause industry to relocate, generally into countries that have no regulation at all and thus making it worse for the environment (you know, despite the boarders we live on the same planet).
The idea that the EU has in any sense the capacity to enforce its own rulings outside of Europe is delusional.
this is not unexpected for any German tbh. falling birthrates, ballooning social security costs nonexistent investments, etc are all issues most have seen coming years ago and tbh this is only the beginning.
And immigration is the only solution.
Immigration is the only solution.
It's the same story for every developed country at this point. It will only get worse globally until the parasitic governments get removed or they cannibalize the populations to irrelevance.
Birth rates are falling around the world. I doubt African countries will start making highly advanced machines and products.
And not to mention the literal millions of third worlders you brought into the country who mostly leech off of welfare and cause social tensions.
Cashing in on German brand reputation by manufacturing overseas will eventually erode the value of those brands.
Also it takes decades to build a good reputation, but significantly less time to destroy a good reputation.
Its already happening at a lot of companys, and its eroding fast. So you are right.
Is already happening, people nowadays prefer a Toyota over a Mercedes.
Eventually those foreign manufacturing practices will turn away consumers from paying the premiums for German brands and will make them opt for cheaper options/brands as they will no longer hold the valued added perception from being fully German made.
Maybe but maybe not. Product band reputation comes more from design and quality not where it was made. Apple is a perfect example of that as is pretty much every clothing brand in the world. And as EE noted, cars. My last car was a South African built BMW, I drive a China built Tesla and have a BMW on order that happens to be built in Germany, but where it was built was not a factor in deciding on any of these cars. Mercedes make cars in Germany, USA, China and South Africa but hardly anyone knows or cares which models are made where
It's an economic suicide, not an economic crisis.
hahahah
Germany can't even stand and investigate about Nord steam incident
We all know who pulled that off.
Being an ally of the US is fatal.
@@voyager2289 And yet, all their allies are the wealthiest countries on earth...
@@voyager2289correction: selling out to russia is fatal
Unexpected? What do people think is going to happen when there is virtually no investment into infrastructure the last 20 years and we are now still working with the same size infrastructure that was build for a 2bn economy and 75 million people. Everything is to full, breaking apart or has processes that can’t handle the load.
But but but black zero
@@ramr7051it is not bad to keep a net zero balance, but if everyone around you does not you will ultimately loose competitiveness. And for the net zero people would actually need to spend money wisely which is also not happening. Why china needs development money is beyond my understanding.
They already have infrastructure. It's because it's difficult and expensive to do business because of overregulation, bureaucracy and high cost of energy.
@@QH96 There are far too many other reasons for the downfall of the entire European Economic Community (EEC) and later the broader scheme of the European Union (EU). In general, companies outsourced technology and knowledge that made them competitive against others, but instead of remaining in cheaper states like Romania/Bulgaria to uphold the promise to create stronger nations in the east of the EU, they started to outsource it to China and the US. Globalism means you have to be competitive by creating homogeneous states that can represent an interest group. However, the EU, with Germany and France at the top, created a union of far too strong nations and far too weak nations. The US has a median income difference of 20k USD, while Tennessee and the South have around 46k GDP per capita; the east and west coast have 70-86k GDP per capita. In comparison, Denmark has a GDP per capita of 78k, while Romania has 15k GDP per capita.
America hasn't fixed its infrastructure in the last 50+ years. They're still growing well, for now at least...😐
Imo the German industry crisis is so frustrating partially because it's, in large part, self inflicted. The government opted to shut down its entire nuclear generation sector in the midst of the crisis at the time when they could least afford doing so. I have difficulty seeing that decision as anything other than deliberate sabotage of their own economy.
Well it's not like they could have just continued to run the nuclear power plants. ordering uranium is not as simple as ordering a pizza.
That isn’t so relevant to most of the industry though. You can’t replace gas with nuclear when making chemicals. Also keep in mind that Russia is a critical supplier for nuclear energy as well, and France has recently shown us that relying too much on old nuclear power plants isn’t a very good idea.
Why not? We're hardly running out of uranium. Plenty of other countries have well functioning nuclear power plants
A century of heavy imposed guilt will do that to a society. They don't think they have a right to exist anymore.
@@HeortirtheWoodwarden oh shut up, no one is actually thinking that
This can spell disaster for the German people. This happened in the US a few decades ago, and it made corporations much wealthier yet left the common man with no good paying factory jobs.
But who wants to have a good life if it's not economically efficient, right
Globalization happened which in itself isnt bad - it made the US super rich. How the US distributed all that wealth is a different question.
@@kenkrak4649it's not people's wealth and they have no right to it. More importantly simply redistributing it without economical backing is inviting inflation to a party.
The days of making things last 50 years ended in the early 70's
Everything became ''Fashion'', throw away, so quality was flicked.
Nothing made today will even last 20 years
when planned obsolescence was introduced
Not even kids 😂
Germany has been offshoring its manufacturing for a long time. My mom lived in Hungary over 20 years ago, even back then huge numbers of Hungarians were making "German" products and I doubt that has gone down since then. Germany has the entire EU as a labor pool and makes use of all of it.
So why wouldn't people buy products that say Made in Hungary?
@flopunkt3665 for one, when it says made in Germany that does mean Germans did something. All the products being made in Hungary were still designed by Germans. But there is still, just like this video mentioned, the reputation of a country. If a consumer sees something was made in Germany they think it is higher quality. Other EU countries like Hungary don't have that reputation.
@@kevincronk7981Bro just say "brand"
@@flopunkt3665 They probably would just write Made in EU
@@hamzamahmood9565 Well no, because the word "brand" is specific to a company's production, not a country's.
Great video as always, but as someone who has lived in Germany for decades, the only unexpected thing about this crisis is that it took so long for it to happen. Some more details:
5:15 Germany is definitely NOT a country with the highest wages, at least not for real high-quality employees. Doctors, Engineers and computer scientists can earn several times what they earn in Germany if they go abroad. Sometimes just moving to Switzerland can easily double the salary (that is even if one considers the taxes and the cost of living)
And this is also the reason for 8:20 No one wants to come to Germany, at least no one whom Germany would benefit from coming.
And 8:50 is factually incorrect, and a hotly debated topic inside Germany: The official "open position" stats are multiplied by 7x by the office of labour, with the reasoning that "not all open positions are advertised". This is in fact false. Not only that, but many advertised open positions are not actually open but merely advertised as such for different purposes, like pumping the stock price or hoping for a unicorn candidate. So it is not at all 750000 open positions, but AT BEST 75000.
Although the "Fachkräftemangel", literally "Specific Forces Lack" (i.e. lack of qualified employees) has been touted for decades in German media, the historic development of average salaries disproves this: There has been no net increase of salaries in decades (net meaning when taking into account inflation). If everyone kept their salaries constant but one single company would increase them, we should see a net increase, yet there is none.
And related to cost of manufacturing: I have seen some companies in Germany successfully compete on cost with Chinese companies, even for simple things like mild steel punch-parts: Punch-presses can make up to 4000 parts per minute (not a typo, the output looks like the cartridge stream of a gatling).
Best comment so far. 100% true
that has also been bothering me for years thanks for the comment
Genau
Look at Germany's youth unemployment rate compared to other European countries (it's 5.7%, 7 EU countries have 20+% atm). If you think that the shortage of (skilled) workers isn't real then maybe you live in a region that has few jobs to begin with? Of course the jobs with relatively low pay & difficult working conditions (craftsmanship, construction, healthcare, retail, food service, delivery) have a higher shortage of workers then attractive office jobs. With industry jobs it's more complicated in the long run because those jobs can be outsourced - but one reason for that besides high wages, high energy prices and bad infrastructure can be a lack of skilled workers. And for employers that means a lack of (high quality) choices for them. It doesn't necessarily mean that nobody is applying for the job.
@@nehalilisaysThe lack of average pay increase means that there is no shortage of workers. There is no price fixing that could explain this, so that only leaves no shortage as explanation.
My labour economic professor had a very thoughtful comment about so called "labour shortage": there is no such thing as labour shortage, only poor wages.
Your professor was very smart. With a PhD. in physics and years of work experience in IT, I've got a 60k Euro job offer in Munich. This is ridiculous if you consider that I have a family and Munich is terribly expensive.
@@FreeWanderingThinker indeed. My prof was a member of the Hungarian Science Academy. To expand on the topic of german economy: as you may know, Hungary has many german owned factories and businesses (BMW at Debrecen, Mercedes at Kecskemét and Audi at Győr to mention a few). Cheap labour and very relaxed worker's law here spearheaded by Viktor Orbán. That's part of the reason many of my fellow hungarians just left the country. If you wonder why the EU didn't exactly step up against his regime, it's because german businesses benefited greatly from his rule...
@gergoturi7559 Yes, it's true. In German, it is called "Doppelmoral" and European politicians are masters of it. Orbán is a bad guy when he limits the rights of Hungarian people or doesn't want to take the immigrants. They like him, though, since German companies profit from his politics. Greetings from Southern Italy!
@@FreeWanderingThinker Funny you say, that Orbán is not taking in immigrants... He actually does, quite a number of far eastern workers have flooded the country and a lot of hungarian workers got replaced by them. Now Budapest and even the rular towns are flooded with vietnamese, indian and ukranian people. But those people are not immigrants, they are "guest workers" according to the propaganda. By the way, I believe the falling birthrate in Europe is the sign, that the labour market is far away from equilibrium, housing prices and the cost of living is just too high compared to the purchasing power of typical wages. Because of that I actually support anti-immigration policies, since it would reduce the supply of labourers, hence force a wage increase in all of Europe. But no, even the so called "leftists" are on the side of the corporations and push for mass immigration instead of protecting the labour market. So my friend, we're all really screwed, we europeans won't be able to afford kids ever.
@gergoturi7559 Sorry, I am not a mother tongue, and I didn't explain well. What I wanted to say is that the Western European politicians present Orbán like the guy who is against everything the majority of the "good ones" propose or decide. They love scapegoats. I know that immigrants are everywhere and they are needed by the system to keep the cost of working low. I am leftist, but I think that this kind of immigration without any rules is the recipe for disaster.
The main issue that I, as a young german with a university degree, see in the current social and economic climate, is the fact that those in charge (be it politics or those running big companies) have not realised who we are, and what we can do. They operate under the assumption that we, the young people of this country, can be shouldered with the issues created by laziness or incompetence, by corruption and arrogance, of the previous generations. They think they can just move business overseas to save a few bucks here and there, they think they can rule over us and charge us unlimited taxes to pay for all their frivolous spending and their gifts towards the pensionairs, and we'll just have to take it.
But that's not who we are. We are smart, capable and resilient - we are not lazy, weak and stupid, like they think we are. We are also well connected, we know many languages, we know and understand other cultures and we thrive in foreign environments. So we leave. One after the other, we pack our stuff and move to places that value us for who we are, for what we can do and for what we bring with us. And that will bleed this country dry. No one I know from my engineering class is planning to stay in the country. Most of them want to move to switzerland, some go to china, another popular choice is norway - The middle east is especially attractive for my friends who have family roots in this area, so a few of them also plan on going to dubai or the UAE. Those places have understood that we are not the boogyman for decades of bad policy. I won't pay my parents retirement through the corrupt and inefficient pension system. I'll send them money from switzerland every month when they retire. It's not only going to be cheaper then the current german system, but it will also assure it actually goes to them, not someone who has never worked a day in their live and recieved their pension as an election gift.
What will come afterwards? We'll see. But I'll be watching from afar, like many others.
Good point. Watch out when you send money from Switzerland, the Finanzamt may tax it too. They just tax everything.
Mein Plan 😂. Bin hoffentlich bald fertig und kann dann auch in eine jüngere gesündere Gesellschaft ziehen.
@@FreeWanderingThinker One word: Cash
@@GermanTopGameTV Bargeld ist Freiheit, cash is freedom 😊
So should I move to Germany?. I am a high skilled worker but my country doesn't value me and I am paid peanuts . If I learn basic level German will I have a better life in Germany ? . Also I am married with a highly skilled spouse will that effect my working or student visa if we both apply for individual visas any ideas kind German people?
They make nuclear centrifuges but closed all their nuclear plants and are expressly against nuclear power😂
“How can we handicap ourselves more guys?!”
The nuclear energy was a small part, failed coal exit and dependence on Russian energy was way worse.
Don't worry, you've shifted to being dependent on US gas instead of Russian. But at least Russia was able to deliver the volume needed by the German industry.
In short, the US convinced Germany to decouple from Russia first and then, one day, the much needed American alternative will come. This is ludicrous.
@@dererik9070 well the nuclear was supposed to replace coal and energy dependence on Russia
@@dererik9070 Nuclear exit literally caused the other two.
@@GameFuMaster
No it wasn't, nuclear energy was never at a point where it could do so and building it up is to expensive and takes to long
As someone from a formerly industrial region of the US (NE Ohio), I can tell you that all of this is just sugar-coating. Milking a brand name only goes so far - just ask Disney. Even if outsourcing brings value to shareholders in greater NYC or California, training your replacement is just as ominous as it sounds.
Exactly!
"Don't worry AI and Apple's vision pro will solve it"____average techbro
Ohioan, take this video as a lesson that economists veil or ignore their class interest and biases. Deindustrialization worked great in the US… for the top 10% of the income bracket. For the rest, its meant social decay and working multiple low wage jobs.
What exactly does that have to do with Germany?
The German government will always try to avoid deindustrialization. The US government deliberately supported it.
From a level high macro perspective. About the finer details I could write books. I'm a business owner myself in Germany. The focus is way too much on our industry that were created a century ago. Germany is unable to support start ups or smaller companies. We are unable to create new big tech here because of all the bureaucracy, taxes and social costs. It is easier to move the company to the US or China to grow. And many companies do that or die. In the big tech sector Germany is unable to compete with the USA. And now keep in mind that Germany produces the mirrors needed by ASML to create the machines for TSMC so that NVIDIA can create chips. It all starts here but we don't do something from it. Yes, old tech that is hard to craft and takes longer to build we are the leader with the highest quality (power plants, cars, etc.). We are also masters in high precision stuff but when it comes to innovation in the new tech and especially SW we are just way too slow. The politicians, the social laws and workers will not adapt until we can't afford beer anymore. That's the problem when you are too succesful for too long. New hungry groups overtake you (just ask Yahoo). In that regard the US way is better. They breed technology (and thus companies) faster than we do. We just need more crazy in Germany, people who dare, people who may fail without judgement and a government who actually wants a great country. And that better before Made in Germany means what it was originally meant to say.
At least since Merkel it was inevitable. Probably before.
The spirit is gone. No moonshot projects. No big goals.
All aspirations went towards "reducing our negative impact" on this or that.
So, reduce they did.
100% correct
Cheap Russian energy is replaced by much more expensive US' energy: crisis is unexpected😂
Boom !!!! You nail it . Jealous Creepy Joe Biden and the CIA and Israel MOSAD Blew up the Cheap Russian Energy and Germany went Bankrupt ! Boom ! Everyone knows !
No. Its Germany's own fault for voting in Greens. Enact Green's policies => your economy dies.
Germany is very efficient... even at destroying itself.
Only to then rebuild itself
They had to help Ukraine
Man the word 'crisis' has lost all meaning these days...😒
yes :))))) and after years of being "the best of us all" some europeans have a little smile in the corner of our mouths...
@@ikaustralia with or without Ukraine the situation would not be much different. with a bit of cynicism you could even say the increased demand in steel for military productions might save the steel industry, because car manufactures steel demand went down so much. krupp steel panzer anyone?
"Garbage goods" are in the highest demand, because avg people cant afford quality
Average people couldn't recognize quality if it slapped them on the face
@@SixTough you can buy me a Merc AMG any day :D
@@SixTough Honestly, how many people would buy Beats over Sennheiser, or Daniel Wellington over Sinn or Laco for the same price?
Also German quality does not exist as much as it did before.Look at Mercedes, BMW, VW group goods and their decline in quality.
Why can’t people afford quality?
Worked with Germans for German people and projects as a consultant. They have serious issues in Administration and digitisation. Lots of services aren't online that were done long ago in other countries, and they can't be as flexible as the English speaking nations in project structure. Lots of waterfall
The UK is hopeless at a lot of things but we're doing quite well on digitisation and bureaucracy is only bad if the company is buying or selling with the EU single market.
Sounds like Japan, the equivalent of Germany in Asia
@@cosmos5610and yet Japan and Germany still build the toughest heavy equipment in the world. I guess its good for some applications. Not good for all
But didnt a German company make SAP?
This is the most important digitalization tool in tbe world. Most outsourcing companies use it
@@deantan4080 One success doesn't reflect entire market performance
American LNG finds this *VERY* unexpected.
And VERY profitable.
6:33 As a native speaker, I never thought about how this company name would sound like to an English speaker. 😄
Wait till to hear about Heckler & Koch
He doesn't sound native
if you think that's bad, start thinking about the phrase "wir suchen dich". Sounds rather explicit to english speakers though it just means that McDonalds is hiring.
@@thatcopenguy😂
@@felixpope6073You've understood him wrong. Try again.
Is this really unexpected, though? Their birthrate immigration crises, along with their choice to shuck their energy sector certainly would have predicted something like this.
Let's not forget about how they got into bed with Russia with the promise of cheap oil & gas - oh boy, that didn't work out, but at least they didn't get the Greece treatment, funnily enough.
@@bernhardstil6128 It's the stupidity of relying on a dictator that's hostile to Germany's democratic system. It's like a repeat of Hitler and Stalin's "alliance" to take over Poland, yet Stalin's was surprised that Hitler broke his "promise" and invaded USSR. Just like trusting Hitler was Stalin's stupidity, trusting Putin was Merkel's.
Immigration is the only solution to the birth rate crisis
No developed country has reversed birth rates back to replacement levels, even Sweden and Finland with generous welfare and universal free childcare
@@bernhardstil6128
Right. Danke Merkel.
As a NZ electrician working in Germany, the germans themselves don't value overseas qualifications very highly, and from working here in Germany I must say I don't value a lot of their qualifications highly. Go figure.
As a BG electrician that worked in Germany I can confirm but also add that Germany is having severe deficit in people who work electrical based profession. Not only that but electricians are poorly paid and young people avoid getting into these jobs or study in said field.
Most of my co-workers were mostly other foreigners usually from other countries from the Euro zone. Germans also have the problem of being overly obsessed on degrees for professions that doesn't require them to be able to operate. Of course trades like electricians, mechanics and so on or skilled workers like engineers, doctors, architects and so on are not on that list but Germans have too much bureaucracy for simple things and lack of proper digitization.
I'm German. The Wacker Chemie AG plant is near me. The electricity consumption of this plant is as high as the city of Hamburg. Due to the shortage of electricity at the site, wind turbines were now planned, which were rejected by a citizen's decision. For environmental reasons. Companies that are keen to settle cannot do so because there is not enough electricity available.
Nimbys will destroy all western societies.
Wir sind ein Elektrizitätsexporteur. Und das seid Jahren schon. Klar ist es weniger geworden, aber wir exportieren immer noch. So Probleme sind maximal lokal, nicht landesweit.
@@jacob-frye-neu1918 Das Problem in Süddeutschland wächst trotzdem stetig. Kommt halt davon, wenn Nimbys Infrastrukturpolitik machen und nicht in ihre Schranken verwiesen werden.
Germany wages are very low compared to places like the US. Also, the bureaucracy is slow, difficult, completely non-digitalized, and painful.
😮
YES!
As a french, I am glad we're finally moving the bulk of bureaucracy to the digital realm. Gov has really progressed in this facet, lots of services can now be done online and quickly. Unfortunately, that also means there are less physical centers with personnel, but for a long time, they've been limited to preprogrammed options anyway. Optic fibre probably facilitated this, too.
But many costs like healthcare, daycare, food and higher education are much lower in Germany compared to the US (not the energy prices though). We all hate our excessive paper-based bureaucracy, so whenever they digitalise something I always get really excited 😂 (For example the "Deutschlandticket" can be used completely digital, it allows you to use local public transport in all of Germany for 49€ per month).
Given the bredth and depth of the german social system taking wages as your only metric here is really not very sensible
The only thing unexpected is that it took this long for Germany to enter recession (without access to dirt-cheap Russian resources).
exactly the economy is a beast they just keep ripping its limbs off
@@hirondelle8734 But they're still buying Russian gas and oil anyway, the only difference is that they buy it at a much higher price from India who got it for cheap from Russia.
@@giantWarioGermany doesn’t buy gas from India. It buys from Norway, Netherlands, Belgium. LNG comes mainly from the US and Quatar.
@@t-bone9239 Buddy neither Belgium nor the Netherlands are huge gas exporters (the Netherlands does have some gas production but it's barely enough to cover their own needs in gas). So what you're actually saying here is that they're buying Russian gas using two middlemen instead of one.
Qatar does produce enough gas to eventually pick up the slack mind you but they don't have the oil. The only ones who can pick up the slack on that front are countries like Saudi Arabia, Iran and Venezuela which are buddies with Russia.
wrong. Gernany had a recession that started right after the war started. It came back, and as of right now it is in another recession.
The fact that this video discussed the rising cost of German energy without discussing Germany's choice to move away from nuclear and become an energy importer instead is confusing to me
I thought the exact same thing. Imagine making your industry less competitive with high energy costs pushing that manufacturing offshore with higher CO2 emissions. It’s insane
Germany has been an energy importer for quite some time. Gas is essential for a lot of processes, especially in the chemical industry. Sure we should've run the old plants for longer. But still nuclear energy is more expensive than wind and solar.
@@julianmueller3787people like you are the problem. Solar plus wind alone are not possible to run an economy. There needs to be another source that can supply the energy when there is no wind and no sun.
Without nuclear, Germany will always need fossil fuels to fill in the gap. Nuclear is the only non-carbon alternative to fossil fuels
They had to sell their WTGs and Panels somehow, so joke's on them.When they realised other countries buiild better and more affordable WTGs and panels was too late....
Well, this economist also conveniently forgot the several hundred billions spent on the "pandemic", so go figure.
how dumb a person must be to call it unexpected. that was one of the most expected things for the last two years.
If this crisis was unexpected, either it was actively ignored by the ones surprised, or we need better experts (and youtube economists).
EE is a naive and ignorant "economist". His takes are so silly and politically correct
@@crimsonlightbinderAbsolutely. The slick production values give a sense of legitimacy and not all of the videos are terrible, but the more you watch and dig - whew boy, some terrible takes and obvious untruths there. I've been subscribed for many years but rarely watch (not really sure why I'm still subscribed tbh), just stopped by this video read the comments.
To be fair, he is not alone here. There are quite a few well produced channels that do really well while spouting face palm inducing takes.
@@crimsonlightbinder They're not "takes." In most cases, he is presenting economic consensus.
Yes, Marie Ann Treloar is also a very highly recommended go-to financial adviser during this economic crisis, she can be researched with her name on Google.
@@Unknown-jt1jo I think that consensus also includes not mentioning that net-zero policies are directly responsible for the current economic disaster.
Regarding the cope with "Germany climbing to 3rd largest economy, so all is well", it's such a ridiculous point to make, given that Germany has been in a recession for some months. Hence, the more logical explanation is that Japan slowed down at a faster pace than Germany, vacating the 3rd spot in the ranks.
In the US we've already come full circle, we offshored a lot of industry to East Asia from the 1970s on and got the Rust Belt and generations of hardship out of it. It's why the cost of a college education increased 100 fold in 40 years as everyone rushed into training for service jobs at the same time (combined with Federal student loans that made it so the Universities could charge more). Which in turn caused the American bureaucracy both corporate and government to balloon as these college degree holders needed jobs. But too many left the trades and manufacturing since we can't all just be desk jockeys, we need farmers, factory workers, plumbers, electricians, and the like to keep society running and in recent years their wages have increased significantly because everyone got a liberal arts degree instead of vocational training.
Like me I'm a Valedictorian, summa cum laude bachelor's degree holder but I work in manufacturing because the pay and benefits is so much better and I don't have to worry about my boss calling on a Sunday saying "Hey can you log in and do mandatory unpaid overtime to fix this?".
“Pay and benefits ARE so much better”
UK experience very similar, except here far fewer manufacturing jobs and the declining quality of graduates aim for media opportunities - very few of those.
@@AlphaGeekgirl I used to be an English teacher too so this is doubly embarrassing but I will leave it as reminder to myself to be better.
You mean shipping all the high skill high paid jobs overseas had a negative impact on the middle class and continued to funnel wealth out of their pockets and to the mega rich? Surely the USA is the exception, in Canada it... Wait. Hmmm. Well the UK.... No. Hmm. Well it hasn't worked out well for anyone else, but THIS time it just might work for Germany!
That isn't "full circle"... to be full circle, the manufacturing jobs (or at least the capacity, if automation replaced the jobs) have to have returned to the US.
I would have thought offshoring manufacturing would be a long term detriment to a country. Having manufacturing locally means continuously growing the hands on skills and knowledge to advance the manufacturing process. If it is all offshored, those skills and knowledge will also get offshored. After a generation, no one left onshore will have the necessary skills to advance the manufacturing processs as all those skills will now be in the offshore country. Most skill growth is from solving problems, so if all the problem solving is done offshore, your country will be left with less problem solving skills over time and therefore less competitive advantage, meanwhile, you’ve grown the competitive advantage of the offshore country.
This commebt is very correct
That is a fantastic point. In Germany, ideally we want to strike a balance between offshoaring activities and training the new generations to keep advancing our industries onshore. This however has proven to be problematic due to the incompetency of various governments who made China and other countries much more competitive E.g. Solar energy panels production.
+ We have a shortage of skilled workers and the replacements are not particularly great, partly because the brightest want to avoid Germany bureaucracy and the fact that Germans still struggle with speaking English (believe it or not even young Germans with a University degree might not speak adequate english), adding on top the bad waves of immigration stemming from middle eastern countries such as Syria Iraq or Afghanistan which have failed to integrate properly, mainly because of the government choices not to vet these people or make the infrastructure necessary to accommodate them and their skills.
It's overdue that the economy is facing a crisis and no wonder right wing parties are on the rise. Im saying this as an immigrant myself.
@@ThePunisher014its not incompetence, it is the spineless elites that have no problem moving everything to a different country to collect even fatter dividends than they already do. Governments have no say over where private companies set up their infrastructure, and the West, where people's lives matter and workers are paid fairly, is fighting a losing battle against autocracies like China that can offer their citizens as slave labor.
Absolutely spot on. As Adam Smith observed, the beginning of innovation is often workers being lazy or as you say solving problems.
The million dollar question: how long until we see tent cities in Germany like other advanced economies like the US, Canada, UK, France etc.
Why would skilled workers be interested in Germany a high tax,unaffordable housing, language barrier where no company says join us we will train you to learn German and the last really do you think the salary is high??
Not to mention you often meet deep ingrained hate towards foreigners *or* at the polar opposite are used by some company to virtue signal how good and brave they are, plastering your face on the next marketing campaign.
You can´t be "just another person" here, really.
Nope salaries ain't high, but costs of living used to be low at least. That changed too
Anti-immigrant advocates in Germany say they want skilled immigrants. Why would a skilled immigrants give up life in their home country with good enough pay, familiar environment, friends and better food? Why would they make a major move to a country with a totally different culture, new language, crazy bureaucracy, and many other unexpected challenges?
It's definitely a lot better than most of the countries in the world. If you really want to maximize your profits, then yeah, I guess you could move to Switzerland, for example. But Germany is doing really well on its own. Unaffordable housing is not unique in Germany and is a common problem in a lot of countries.
It is really the language barrier and bureaucracy that keeps people out. The salaries aren't great but what many miss is that most costs you have on a daily basis are much lower in Germany than in many of the typical places where people immigrate to. When people compare salaries they often forget they stuff like free child care in Germany, free university, cheap public transport, housing is relatively cheap as well outside of the major centers (and most Germans do not live in any of the big cities anyway)
I'm also uncertain about the prospect of there being more service jobs. I work as a software engineer in India, and my friend is employed at Siemens here. He mentioned that much of Siemens' development work is carried out in India. Manufacturing jobs tend to go to China, while service jobs are increasingly headed to India.
Isn't india too increasing its competitive advantage as now
The reality is that lots of office jobs are just very accessible now, and indian capitalists have taken great advantage of this to offer equal level service at a far lower salary. Germany transforming into a financialized economy won't solve anything, because it won't give them any more advantage. There are so many talented indian software engineers that it is becoming harder and harder for people in the west to compete.
Doesn't matter. In the long run no one is gonna get those jobs. China already has the most industrial robots in the world, and AI is gonna eat into India's service sector jobs. Ultimately machines will do a large portion of the work, needing far fewer humans.
@@ArawnOfAnnwn Funny enough that AI will scam less than India too lol
@@ArawnOfAnnwnless work for humans can only be bad news in our current economy
As a Born german i no longer feel very proud to be german. It feels like other countrys are way past us in every way possible. "MADE IN GERMANY" has no value anymore. And i think it goes down to politics. We have no Resources in the ground. No strategic place. We only have our engineering Mind, knowlege and "out of the box" thinking. But the problem is that our government does not focus on our future, the Kids. Schools often don't have things like Wifi, smart beamers and are run by old people with old views. No wonder we score so low on all these Tests.
it's simple. Germany shot itself in the foot by moving to intermittent energy sources that made it dependent on gas to pick up the slack, which made it dependent on Russia. You can't have a competitive advanced manufacturing industry without reliable, dispatchable and cheap energy. Germany is going to face a long long decline. Why does the OP feel the need to put a positive spin on what is really a completely avoidable tragedy?
But wasn't the gas from Russia cheap and plentiful until the United States got involved?
Relying entirely on Russia for critical energy needs and being reliant on Russia’s main competition for military security (US) was always a strategic blunder that was going to end badly.
Only 12% of the natrual gas was directly used for energy production both in 2012 and 2022. Sure the increase in electricity cost had it's impact and was most visible to the German population, but the biggest part of the gas consumption is direct use in industry (35%) and for heating (32%). We would indeed have had a little bit more slack with nuclear power, but not nearly enough to not be impacted by the war.
One problem is the crazy burocracy madness that is going on in germany . This is especially true for small or medium sized companies . If you want to build something for example prepare for years of delay . Everything is sooo slow and the officials take every chance to make future planing and investing as painful and expensive as possible .
So you mean nothing changed in the last number of decades? You are saying this like bureaucracy is something new to Germany.
@@hardopinions"The beaurocracy is expanding to meet the needs of the expanding beaurocracy". It's the mentality of having to regulate everything. And unfortunatly this is done rather inefficiently.
@@hardopinions The amount of regulations has increased tremendously in the last years. It's become so expensive to build and the workforce isn't even the expensive part.
... and if there's no national rule about something, you can be sure the EU will jump in to make it sufficiently complex.
Gotta love when Keynesian economists declare things "unexpected" or "impossible to predict" in willful blindness to the other schools which seemingly "do the impossible."
Afraid of making of making predictions that could prove them wrong
It's kinda hilarious
This guy trashes Capitalism and Economists constantly, but I haven't heard him say "socialists" one time eventhough he made a video about my country which is lead by a coalition of the socialist and the eco-socialist party.
"Keynesian"? Germany is the home of ordoliberalism in macroeconomics! (ordoliberalism, btw, has no relation to the way Americans use the term "liberal" - ie as a term of abuse to avoid thinking about actual policy). In macroeconomics ordoliberalism is about hard currency and avoiding governmment debt, in many ways the opposite of Keynesianism.
This video is correct that Germany's woes are mostly about the rise in QUALITY of Asian (not just Chinese) manufacturing. It has lost its edge in quality as others have caught up, while retaining the high costs it has always had.
@@kenoliver8913 High costs because of high taxation, lots of buerocracy and High energy costs as well + inflation, while paying China "Entwicklungsfeld" and giving them special access while they steal our technology...
I hear the "incredible engineering prowess" of Germany while looking at how my BMW engine miserably broke down after just 150K Km. Then I chuckled before crying looking at the price tag.
It's not called "Bring Mich Werkstatt" (Bring me to workshop) by many Germans for no reason
This video has as educational value as watching some instagram reel.
The absence of innovation, excessive bureaucracy, the dearth of emerging unicorns, and soaring gas prices have rendered Germany less appealing and investable. Germany is on track to mirror Japan's economic trajectory in a few years, given its stagnant GDP growth over the past years.
Bot account pasting the same comment everywhere lol
I lived in Germany but I ended up moving to the UK, there is too much bureaucracy. Also, as a foreigner with basic German, it was really difficult to find a flat to rent
Brexit is the right amount of bureaucracy? lol
@@ctg4818 Brexit created a lot of bureaucracy for companies that export or import with the Single Market which is a huge problem of course. But otherwise the UK is relatively light on bureaucracy and the government agencies are all digitised and efficient.
I hope life in the UK is working out for you.
As a german with native level German it is really hard to find a flat as well. It's like they made up their own language for that
Au, that's actually a problem.
unexpected? bruh actually it's very expectable 🤣🤣
5:23 - The income is not very high, as you can see in the graphic.
Also Germany has a high income tax, compared to the USA, Canada etc..
About the issue of off shoring manufacturing: China has shown that once you teach someone to catch a fish, they don't need you after that. So, there is also a national security problem, where you need at least some manufacturing capabilites, so that over reliance on a political competitor does not screw you in the long run.
China was happy buying German machinery but Germany followed US sanctions and start limiting what they sell to the Chinese. China can either live with less efficient and older machinery or try to develop their own. It also made German luxury goods less desirable in China because less people want to buy from a country that's hostile
@@Peichen01 German economy is doing pretty well, production is only down 1.6% in 2023 and this is mostly due to higher interest rates becasue of inflation, once inflation is resolved, rates start to come down then we will see what the truth is, if German economy blooms and grows very well then its all meaningless talk, Russian Gas, sanctions might all mean nothing in the long run. Don't forger Germany exports to China might be falling but look, it is EXPLODING to other countries as manufacturing is leaving China other countries now need to buy German machines. Mexico, Turkey, Pakistan, Indonesia, Brazil, and on and on.....
@@Peichen01 That's incorrect. The chinese government has always liked to fan ultranationalism to suit its political agenda. Even before sanctions, the government like to fan antiforeigner sentiment whenever someone visit Taiwan or criticize (with good reason) about human rights. I'm old enough to remember all the propaganda the government used in the last few decades. It really didn't matter which country or for what reason, the government always like to use antiforeigner tactics to serve its own goals.
@@drscopeify "Mexico, Turkey, Pakistan, Indonesia, Brazil, and on and on....." probably gonna order German and Chinese machinery in equal measure
@@xiphoid2011 China is probably the least ultranationalistic of all major industrial nations. Look at the number of German and American products in China including cultural outputs. Now look at the brouhaha over Chinese telecom equipment, EV, and movie joint venture in Europe and US
Toyota makes the same number of cars as VW with 2/5 of the workforce. The high cost of German workers is often hidden.
No, Germany artificial suppressed wages to keep employment high. It is well known.
But gERmAn eFFiciEncY
@@MSportsEngineeringDoesn't exist. Thoroughness is not the same thing.
Also VW was a great brand. In my country it was famous for being a reliable car. Today its a brand that survives on its name. How long will them survive relying on their past. German brands became unreliable, there's a documentary from Deustch Welle showing how they have a high cost of labor and regulations that makes the cars unreliable and their workforce
If I had any I would sell my Volkswagen stock and buy Toyota any day.
VW Higher energy bills will be transferred to the customer. Same happened to English cars, nobody wanted to bey them in the EU.
Unexpected?
That's 100% self inflicted
We have a thing called Lohnveredelung which makes it possible to slap on the label “Made in Germany” just because we do the very last steps in an assembly line in Germany. That way we leverage cheaper labor costs around the world while still checking for quality in the end and using our reputation:)
Absolutely no part of this was unexpected.
"Unexpected?" - Peter Zeihan has entered the conversation
Ah yes the CIA propagandist
As a German, i can say its not unexpected by anyone with a brain. Most issues were self made by terrible politics over the last 15. years and giving up core decision like Central bank to the EU.
The problem is that with German car companies in particular, their products are crashing in quality and reliability. Mercedes made cars that were the mobile equivalent of the bank vault in the 1960-90s. Not now, they are at the bottom of the JD Power surveys along with Jaguar/Landrover.
Man puts stick in bike wheel meme...
Last year I participated in the acquisitions of electron microscopes from germany, which I always thought a technology that was exclusive of Europe and Japan (Zeiss and Jeol).
But just recently, we were offered FESEM solutions from china at less than half the cost. Wonder if this market will slip away from them just like it happened with high-speed rails.
Let's see if it has quality and capability that is adequate for your application.
@@piotrd.4850
The compromise is inevitable, isn't it? But one can't help but wonder how long it will be until the Chinese counterparts catch up, particularly given the strategic importance of technologies bolstering the nanotech sector for the Chinese government. Personally, I wouldn't compromise by purchasing a Chinese model for research operations.
Now, turning to the realm of rapid microscopy, let's consider how those Chinese 'desktop' scanning electron microscopes (SEMs) stack up against Thermo Scientific's 'benchtop' models. Frankly, the latter already grapple with maintenance issues.
I didn't expect China could make FFSEM.... thanks for sharing.
Reality doesn't matter. That one line sums up most of economics.
Germany started de-industrializing when NATO blew up the Nordstream pipelines. I am surprised Germany fell for it.
Without affordable energy, industry doesn’t work.
🎯
@@fredgarvinMPI see Miele is moving closing part of its German production (about 2,700 jobs) and relocating it to Alabama, USA.
Wir schaffen das!
Sucheribit
Surprised by this outcome? It seems quite predictable. Many could foresee the challenges ahead since 2011, following the shift away from affordable and dependable energy sources.
So you're talking about nuclear power plants which were used for electric energy, right?
@@Bobylein1337 Not exclusively. There are many other dependable and affordable energy sources on german terrain. What makes you think i was talking about nuclear power plants?
Your channel is very informative. Big thanks for your effort and time
Honestly speaking, I don't get impressed when some poor country hits the headlines as being the fastest growing economy and such. This is because, most of this so called growth is just paper growth with little to no real improvement in an average person's average income and standard of living. Despite reporting high gdp growth, several of these poor countries don't have any improvement in basic amenities and infrastructure, don't have any major reforms Implemented, can't stop brain drain, sees worsening social order, sees increasing corruption, sees increasing income inequality, poor social security and don't have any plans for sustaining the high growth. Average incomes of the people may increase, but the costs increase faster resulting in negligible improvement in purchasing power or savings. Increase in unexpected costs and weakening currency add further fuel to the fire. Hence, before getting overhyped about a poor country being the world's fastest growing economy, dig deeper and find out whether these underlying issues are getting solved or not. Mere GDP growth does not make a country developed. It involves solving the underlying problems mentioned above as well.
it´s mostly because they have a bigger population and nothing more, personally i don´t believe that indian can became another china,they lack the vision imo.
The usa and europe are still richer on average than everyone else if we weren´t they wouldn´t want to emigrate here from latin america,africa and asia, chinese have the mentality that they need to help china be a superpower and win over the usa, indians don´t have that mentality imo.
Btw did you watch mrwhoosetheboss video talking about indian tech but 90% was chinese produucts🤣
I guess this kind of news is for investors, but gets marketed as news for everyone.
@@noneofyourbusiness4830 Good point
Living in Germany, the fact that they could increase the service sector is really alarming, the ones they have now are traumatic enough 🙈
Totally 100% expected, and when they actually fall into recession no one will be surprised.
The problem of offshoring is that you are sending expertise abroad making reshoring (for security reasons for eg) hard
It's weird how conniving to sabotage your own energy supplies can hobble your industrial sector :-)
Yes, but it is (probably) not Germans who blew up their Nordstream. Germans just following orders, that is what they're good at.
It's not unexpected. The moment the NordStream pipelines got blown up, it was obvious that Germany's industrial capacity would take a massive hit.
The USA has a long memory when Germany and France did not back them in another middle east war they don't forget, only the lap dog UK supported them, how stupid are my government 🇬🇧
I mean they still use Fax to send documents 😂 I thought it died out like 20yrs ago but nouuuu
Much appreciated! Been looking for this to get the right location on my SLK32.
There's not too many Made in Germany products in the US but I'd welcome them. If they're actually made there.. I know my dog's adjustable leash was made in Germany. I purchased it because it was the only one that had the longer length I needed. I looked everywhere but couldn't find anything that went as far, so I paid the higher price.
The problem with loosing skilled workers is when the geopolitical environment requires rapid onshoring of Key technical and military applications. But as we see it is NOT a quick turn around and countries that once made a lot of something mundane like 155mm HE artillery shells now can only make a tenth of their Cold War capability. When the Cold War does return just like eventually Winter or worst the Next Ice Age, then such a missing capability could actually result in a fundamental military loss in capability and even resulting in loss of ability to sustain a "traditional" war more than just a few months.
We have the same issue here in the Netherlands, highly skilled employees are hard to get. Expats might need to pay more taxes due to changes from the government which result that less expats will be interested to work in the Netherlands. Also big companies like Boskalis and ASML want to grow and have trouble hiring more employees and are even thinking about leaving the Netherlands. I really hope things will be better, but the future is grim.
I have a PhD in physics and work experience in electrical engineering/IT in several countries. I don't know how many times ASML has rejected my application without even inviting me for the first interview. I just think that they pretend they don't have enough applicants. "Fachkräftemangel" is a well told joke.
As an 3rd world immigrant who worked in Germany, there is no labour shortage. There is a corporate sugarbaby shortage. Most existing workers in the firm do their darnest to either not get immigrants into job in the first place and even if they come, they do whatever it takes to make sure they are in the top of the firing list.
The employers aren't helping either. Their motivation is to undercut the existing employees and reduce their bargaining power. There are plenty of young Germans entering the workforce whom we just rejected from the job for no reason. Then other workers, rejected the immigrants similarly for no reason in retaliation.
It is similar in USA, but the pay is 2-3 times as much. Naturally those who have options just move to USA.
And this is the way of Germany trying to tell the world that "going green" is the right way to do.. while the whole country is breaking apart..
The green transition is expensive but ultimatly the only right way.
Indeed the green transition is the only right way, but Germany surely botched it the moment they started investing in coal again and virtue signaled with their nuclear phase out@@DommTom
@@juimymary9951 Yeah, when looking back the nuclear exit was a mistake. The debate was run with prejudices rather than with rationality and during a time where things weren't this turbulent.
But unfortunatly it can't be undone now. The Grenn Transistion has to go one anyway. And to end on a positive note, the expansion of renewable energy sources is ganing more pace.
@@juimymary9951Stop this nuclear bs, its way more expensive than other clean energy sources.
@@DommTom not at the expense of bringing the country back to the third world. and when you are a third world, you can't afford to go green. so don't go full retard.
It was totally expected, they ruined it themselves by banning cheap resources from Russia, leading to higher end prices and heavily weakened competitiveness
germany's economic crisis is carefully designed and implemented, so it's the opposite of being unexpected.
So axing its energy policies by relying on russian gas, ending nuclear and count on wind turbines for its electricity was probably not a good idea...
Honestly I never understood why Germany banned nuclear energy, like what in the world can justify this decision? And now it appears that it's not sustainable to rely on outside sources of energy. Who could have thought.
Muh Chernobyl. And all those killograms of nuclear waste.
@@mnemonicpie *kilograms compared with the MEGATONS of CO2 that are produced every single second by fossil fuel power plants, to drive home how ridicolous the nuclear waste hysteria is
It was opportune because nuclear plants cannot be run at the height of Summer -- France shuts theirs down as well -- and the fuel came from Russia.
Most of the Uranium are produce by Russia. Even America buy Russian nuclear fuel and it is one of the new items not sanctioned. Aside from that, it makes no sense shutting it down to use coal in the name of global warming.
nuclear energy power is excessively expensive compared to renewable sources. We're on an economics channel, Im sure you can do the rest of the math on why you shouldnt build nuclear power plants.
I see many people complaining about elektrisity and infrastrukture as a big problem for the german economy, but realaly these are the result of Germany not having replacements for their labour force, so nobody invested into the inevitably declining labourforce or their infrastrukture. This is now felt as companies leaving and infrastrukture reaching its limit.
This is also no unexpected development, it has been known for the last about 20 Years and now is just reaching its tipping point.
It's interesting to see how in some industries Germany has lost some of its competitive advantages while in others it's still undervalued. A lot of people I know who've owned a VW will never buy another. Meanwhile German watch brands are viewed as highly undervalued compared to the Swiss brands in the collector community. The latter is an example of a sector where they don't have the kind of legacy prestige they do in other fields and can't rest on their laurels.
For those of you with an interest in military economics, Perun did an interesting video that you could view as a complementary case studio. Thanks for posting, Economics Explained.
If we Germans don’t wake up and start to vote a party which actually cares about Germany, it's going to be over for us.
Skilled workers are not that interested in Germany due to high taxes and lower average wages than the Anglosphere. Germany is an egalitarian society with controlled inflation, but foreign workers are mostly interested in sending more money back home.
In order to manage its looming productivity crisis, what Germany needs to do is perhaps a mix of setting up joint ventures abroad (in countries like India, Saudi, Turkey, Nigeria etc) and focus more on servicing these installments abroad, and also manufacturing tools and machines needed to operate these technical investments (so they earn ROI from investment, and also maintain in-house manufacturing sector).
But of course, solutions are needed for the population crisis fast.
Crazy to see predictions from someone you’ve followed from a decade ago come full circle
Give me an example of developed nation with high manufacturing centric economy?
It’s very difficult to manage high income expectations while keeping low wages and manufacturing costs but you can still run R&D.
"unexpected"??? we all knew what was coming.
No mention of dei which is reducing the efficiency of companies and the abilities of companies to ajust to a constantly changing environment
Which DEI is in Germany?
Would love to see a video discussing the impacts of wealth taxes on countries. It's such a relevant and complex. topic
5:24 How do Italy, Spain and France have a higher median household income than Germany and Canada and Australia have a higher household income than Switzerland and the US? That map doesn't make any sense at all. Wages in Italy and Spain are a joke compared to German wages.
Same thought here. My only explanation would be that it shows household income and Germany might have more single-income households than other countries. But I don't know if that is true.
Maybe "house-income" doesn't mean wages only. Maybe. Maybe.
Good Point. Maybe it shows the wealth in assets overall. Germans have the second lowest median fortunes of the Eurozone. Although the wages are three times the ones of slovakia, taxes, insurances and cost of living (rents) are higher. Only the swiss have less real estate property. French, italian and spanish households typically live in a house they own, that might be a difference.
Yes, but Italians usually have a lot of savings and own a home. It is almost impossible to buy an apartment for a normal family in Germany, even in small cities.
Wow, someone doesn’t understand Purchasing Power Parity (PPP) 😅
Language plays a bigger role than many would think.
For example, I came to Germany to explore the tech industry. The language requirement to naturalize is a big deal breaker for many skilled workers. It's quite easy for me to work here for a few years and then just go to Canda or Australia and naturalize there if I want to.
You do not learn German to find a job in tech industry. But if you are not skilled enough, then it changes.
@@XY-uc1tw but if you're skilled (enough for what you're talking about), you don't go to germany in the first place
@@titanicisshit1647 Exactly. Being skilled and seeing what Germany offers, no, thanks. And they were always a bit full of themselves. When I asked a German visiting our company a long time ago and I asked about jobs there, he told me immediately, that I need to know German or I don't have a chance (as a software developer). No, thanks, I was laughing after that discussion. I skipped the German part, I am earning more than I would earn in Germany. Headhunters few times a year send me some poorly paid (and I am comparing the figures before tax, after tax, it would be even worse) jobs there (sometimes they even want to speak German).
What the video does not say is that the main problems for German industry are not even due to natural gas prices (gas is cheap now), but because the EU has forcibly reduced gas consumption by about 20%, primarily cutting energy-intensive production. They did it to guarantee enough gas for heating even in case of frosts in winter. Electricity prices are also rising because of the "green transition", in terms of which Germany is among the leaders. Nuclear power plants were closed, coal-fired generation was reduced to a minimum, the population subsidized green sources, now the costs have been shifted to industry too. And industry from Germany is leaving Germany for the US, where gas is cheap and there is virtually no "green transition", or for China, where labor is cheap and there is no "green transition" either.
Gas prices for consumers are back down but for huge users like the chemicals factories they are still very much higher. LNG from the US is 40% more expensive than Russian gas. China does have its own energy transition plan and the country is building massive amounts of renewables. But yes they are increasing coal burning too.
Even in the useless wind and solar Germany is not among the leaders. In clean energy it's one of the worst. "Green transition", my Arsch.
@@Purple_flower09 China might have a green energy transition plan, but it's all facade and no execution. They just do it for the positive publicity.
@@ImaskarDono Well, Germany voluntarily killed its entire solar industry in favor of China a few years ago.
@@ImaskarDono Actually "green enegery" is much cheaper than nuclear and coal, it's cheaper to produce and to buy, too, but the market drives the price up artificially to make more money. It's a dirty game and no politician does something to stop this, although it's a crime, nämlich Wucher. Bewusste Wucherpreise.
I remember years ago looking at Bosch fridges and deliberately buying one series over the other just because it was made in Germany. I think consumers are a bit more savvy (and wary) these days to outsourced manufacturing
I work for a big german corpo, specifically in logistics.
We may be outsourcing production of many parts or products but they still run though germany first and there through VERY strict quality controll to make sure that they are up to company standard.
I met a German in Nairobi doing solar installations who moved from Germany to Kenya and he said Africa is the best place to grow. Germany is stagnant.
12:53 this is very true. The new VW cars made in India for India are not of the same german quality and fit and finish as before. I've had a VW polo for a decade but will switch a different car maker for my next one.
Typical tamillian looking down on 🇮🇳
The Duran channel was talking about this for a year now...
Ever since that Polish guy thanked US for blowing up the NordStream pipe...
Great video
A large part of Germanys economic success has been the Euro which has provided German exports with a massive advantage given the rest of Europe is effectively subsidising their export lead economy.
wrong, German had also very good economy before Euro.
@@XY-uc1twyou’re right, @emmeett3067 comment also doesn’t consider the massive advantage the other European countries get from Germanys economy and the eu funding payed by mostly countries like Germany/france etc
@@XY-uc1twGermany in the 90s was literally called "the sick man of Europe".
@@skibidabndada6683 I mean lets broaden it up. Would you be willing to abolish all external EU barriers if China gave 30 billion euro to German politicians? Yeah, exactly. Suddenly, that EU funding sounds like peanuts in comparison to such value.
And mind you, when it comes to EU countries that are the most beneficiary of that funding, political class there is more corrupt than in Germany. So they siphon third of that money for themselves, and in doing so, they create complex bullsh*t system that puts that money into garbage projects so it doesn’t look so obvious.
So the money taken from a tax payer isn’t equivalent to the money received from EU. At best its value is like half of it. Some infrastructure was build from it, which was positive.
You have to understand, that when you say to someone from a receiver country that “we give you EU funds” they will understand that as a politician from their country builds himself a hotel from that money under some “promoting EU tourism” scheme.
Nobody ever will be grateful for that.
germany gets called "the sick man of europe" every few years tbf.
it hasnt been correct yet @@f.5233