Why our people earn less and less

Der Spiegel ^ | 16.10.2006 | Gabor Steingart

[Rummenigge]

Asia is fast developing into an economic powerhouse, with China and India gradually transforming themselves into the new masters of the universe. Meanwhile, the West faces the prospect of losing the globalization game, as European labor is devalued -- by the millions.

[Rummenigge]

The shift of work force is one of the major threats to global security in our times. Please comment.

[Mikey_1962]

Germans are earning less because their productivity is not increasing.

[durasell]

What do you have against everyday low prices?

[G-Man 1]

Like water, wages will seek it's own level. The lowest wage will rise and the highest wages will fall. It's a matter of time.

[G-Man 1]

Like water, wages will seek it's own level. The lowest wage will rise and the highest wages will fall. It's a matter of time.

[CarrotAndStick]

This is more of an "Old Europe" problem, than a Western one. Specifically, in Germany and France.

[MonroeDNA]

Unions are threatened.

Good.

[WOSG]

Der Speigel hates America.

See David Kaspar's Mediacritik.

http://medienkritik.typepad.com/blog/

[IndyMac]

Why are US wages rising?

[AdmSmith]

Do not worry. The Chinese banking system has big problems due to low profitability of the Chinese companies. When they will address this many companies will go bankrupt. The fight for workforce will increase the Chinese salaries, and the increase in interest rates will force increase in selling prices for the goods in order for the companies to provide profit. Combined with increase in exchange rates the cost of the Chinese products will increase. We will never be able to purchase Chinese products with the low price that we have today. Let´s party now...

[tomzz]

China right now is missing something like 60 million women due to their one-child policy. They're going to need a flag with a hammer, a sickle, and a pink flamingo on it.

[EQAndyBuzz]

Market forces drive the world. When up against regressive statist business policies, companies become less productive because of defensive measures to avoid employment lawsuits.

Eventually the company moves, goes out of business or is bailed out by the government and used as a money losing jobs program.

This is Europes problem. They cannot close down and they cannot move so they become a jobs program. They aren't concerned with stockholder equity or being profitable.

[WorkerbeeCitizen]

Another issue we face is US state education system turning out youth that are ill prepared for the workplace. I expect the US to have a shortage of suitable professionals to supply our industries.

[Glenn]

Another issue we face is US state education system turning out youth that are ill prepared for the workplace.

We get a new batch of interns every summer from the local universities. Most of them are incredibly good. A few clunkers who drink too much and talk too much. But the majority are very driven, very smart, and a joy to mentor.

There have always been winners and losers in every high school graduating class, and it will continue to be that way.

[Leisler]

People are unlimitedly inventive. The tone of the article is from a zero some perspective. That is that if some poor guy, working for food gets a job, a guy in the west is laid off.

We need to have a little faith. Just making things isn't enough now adays. People want quality. People by MP3 players but want Ipods. People buy cars but want a BMW, even in Japan. The thing itself is no longer sufficient. People want to buy the idea, the style, the fashion.

Germany's problem is the difficulty in new, young business growth. It is difficult and expensive and the risks are high and profits low. This makes it hard for technical, medical, scientific business growth that would hire young Germans and become the future leaders of German industry. It seems like such a waste of schooling, youth and talent.

This anti business atmosphere is not so much one of cost, but of time. When dealing with government permits, time means nothing to government and who's workers that are habituated to pay checks coming in more steady then the tide. Government workers and agencies know nothing of competition or the time value of money. In the states many business move from older, slower, more bureaucratic states in which permits, if gotten at all, take lots of time, move to younger, quicker, lower tax states. As a phenomenon it wouldn't be bad if state workers just stayed home, then only the tax burden would have to be carried. As it is now, each state worker wants to have a say in everything, at every level so to justify and protect their job from wrong decision making and risk. Thus each worker is incentiveized to be as slow and as cautions as possible. The more state workers, the more commissions, the more hearings, the more permits the more costs the more time. Meanwhile in Florida, or China the competitor is up and running, and what does the state worker care? Back to the article. First labor goes. Then business. But what happens when, as is happening now, business development is done quicker and faster in Asia? That is were the article author should of looked. No business, no jobs. But, still the state doesn't care because they can manufacture their own gold through the printing press, credit markets or higher taxation.

[DB]

Socialism is what is destroying Europe.

They are becoming less and less competitive as a result.

When you reward people for not working you get more that don't work. They drag down the rest that do work and take away that capital that would otherwise be available for productive investment in the future. Instead it just goes down a black hole...

As far as China goes, I don't think their capitalistic business practices are compatible with their totalitarian government. Those two forces are going to come to a head sooner or later. When they do, the government is going to fall.

[sphinx]

Through 50 years of the Cold War, we argued that the communist block should abandon the dead hand of socialism and join the market system. Now they are doing it, albeit with bumps along the way. This is what victory looks like. Certainly there are challenges, but the world has become a dramatically more productive (and therefore more competitive) place. This is a good thing in the long run.

The author here makes a fundamental error that runs back to the earliest leftist critiques of industrial capitalism -- he forgets that mass production implies mass consumption. We have seen the proliferation of an incredible array of new products and services, and many of these are available at astonishingly low prices. This needs to be factored into any analysis of living standards.

[Leisler]

Government is dependent upon poverty, welfare and crime. The schools are just turning out the products government needs to prosper.

[DB]

Agreed. The pie can be made bigger as apposed to only so much pie being split into smaller and smaller pieces.

[Leisler]

There are no laws of physics or nature that require poverty, or limit wealth.