Streams

Creating Jobs Around the World

Tuesday, July 19, 2011

How do other countries create jobs? Michael Schuman, Hong Kong-based Time Magazine correspondent, blogger and author of The Miracle: The Epic Story of Asia's Quest for Wealth, examines this question and follows up on a claim made by Dr. Henry Kissinger on The Brian Lehrer Show about Germany's job creation.

Guests:

Michael Schuman

Comments [21]

Scott H from Westchester, NY

Brian mentioned VW as a lower cost German brand than BMW/Mercedes seeming to be using that to say that successful German products don't have to be high priced, but as I understand it, unlike BMW/Merecedes, VW also makes many cars in Mexico.

On another note, it's kind of interesting that, in this country, we complain about a trade deficit due largely to cheap products of largely questionable quality from China, whereas it sounds like the less fortunate countries of the EU have the opposite problem of a trade deficit due largely to somewhat pricey products of high quality from Germany. Of the two, I'd rather we had their problem. I think it would be easier to build a strong economy based on making better products rather than making cheaper ones... trying to making cheaper products than China will always be a losing battle, and you're not going to build jobs that way, much less well paying ones.

Jul. 19 2011 04:28 PM
David from Brooklyn

Yes, quality counts. Why pay a premium for a made-in-USA shirt whose stitching is just as uneven as the one made overseas? I didn't, and won't. If you're going to charge me 100% more, at least give me some improvement in workmanship.

Jul. 19 2011 12:00 PM
Martha from Brooklyn

What Clea said: universal health care! Canada has also fared better during the economic crisis, and universal health care is a big part of it.

Jul. 19 2011 11:42 AM
Alvin from Manhattan

I'm disappointed in Brian Lehrer's handling of this topic. There is an article by Steve Rattner in the current issue of Foreign Affairs that covers this far better, and Mr. Rattner would have made a better guest. Rattner's article encompasses everything discussed today, and much more. Examples: The Euro is undervalued relative to what the German mark would be worth if it still existed. Germany invests more in green technologies than the U.S. While the family-owned "Mittelstand" companies are not slaves to quarterly results, they also produce specialized, often technical products that have less competition.

Jul. 19 2011 11:37 AM
gary from queens

There's no mystery to debt!

A nation's economy must grow. It grows only when it produces something the world will pay for. THAT IS IT.

The european nations in debt now are living off the wealth that was created over a century ago.

They rejected capitalist model which rewards the investor class and innovators. When they're rewarded with profits they're allowed to keep, the wealth trickles down and lifts the lower classes.

This is not the ideal altruistic model we would like. But it is the only successful one which works.

Jul. 19 2011 11:35 AM
henry from Somerset

The "short term outlook" stranglehold of our financial system over the general economy has paid off as long as there was little global competition. It is outmoded in its present form and works against the interests of the people.
All the other arguments cited about the weakness of vocational schooling etc hold true too.

Jul. 19 2011 11:34 AM
John from NYC

Brian should invite former US Senator from North Dakota Byron Dorgan for a conversation. He wrote a book tilted "Take this Job and Ship It - How Corporate Greed and Politics is Selling Out America "

A link to the background notes on Germany from the US Department of State

http://www.state.gov/r/pa/ei/bgn/3997.htm

Jul. 19 2011 11:34 AM
clea

health care, health care, health care. i can't believe health care has not come up in this discussion. part of the germans' 'high standard of living' is that they all have health care. and health care not being part of an employee's compensation package makes the equation radically different for employers.

Jul. 19 2011 11:31 AM
Andrew from Manhattan

Universal national health care (not tied to a worker's company) and a national commitment to excellent education give Germany its greatest advantage relative to the U.S.

Jul. 19 2011 11:29 AM
Leo in NYC

I have wondered about this topic for YEARS and I can't believe this is the first time I'm hearing it discussed. This basic question of the sustainability of the American standard of living in the face of globalization.

Here's my question: is there a ratio of minimum-to-maximum standard of living
(maybe expressed in purchasing power..?) that allows for a fluid labor market?

In other words, how rich can poor people get?

Jul. 19 2011 11:26 AM
John from NYC

In Germany if you are on a vocational educational tract, you are in school in the morning and apprenticing at BMW (etc.) in the afternoon.

We have dismantled vocational education.

That's OK, we will all become bond traders.

Jul. 19 2011 11:24 AM

Germany is a sound country; honest, industrious, successful and sane. Wish more countries would follow their model. Btw, their leader is female; "just sayin'."

Jul. 19 2011 11:23 AM

Let's review some of the other features of northern European economies:

1. Greater social safety net.

2. In the economic decline following the financial crisis: NOT ONE country in northern Europe saw anything like the increase in unemployment that the US did. Not even the UK, which comes closest to copying the American style.

3. Greater life expectancy.

4. Better performance on indices measuring citizen happiness.

5. Better educational, transportation, power infrastructure, etc.

On almost every measure of economic and lifestyle performance, northern Europe outperforms the US.

Jul. 19 2011 11:22 AM

Ha!

Mr. Schuman is wrong so far on at least two points.

1. In recent years, German cars have gotten pretty poor marks on quality. American quality in the past 20 years has done very very well.

2. American manufacturers and other businesses are hellbent on maximizing profit, no matter what.

Mr. Schuman gets something important right: Germany, like France and the Scandinavian countries have a different corporate culture. There is something like dedication to workers. This is evident in the social safety net, in the retention of workers, etc.

In the financial crisis unemployment in Germany actually DROPPED, even though Germany suffered a recession also. Germany implemented _workshare_. Rather than lay off people, Germans reduced hours and pay.

Germany has a fundamentally different frame of mind. High-end executives just _don't_ grab for every higher pay at the expense of everyone and everything.

Jul. 19 2011 11:22 AM
tony from bayside

Question: Isn't one of the main reasons the jobs like we are discussing are not here is because the obsession with american companies to prop their stock price and the bloated executive salaries? Why can't there be tax incentives for companies that have jobs here?

Jul. 19 2011 11:22 AM
Carolita from NYC

I have a question! When can we go back to saying "well-paid jobs" instead of "good paying jobs"? (is that opposed to good non-paying jobs, or just a case if bad grammar?)

Jul. 19 2011 11:21 AM
jgarbuz from Queens

First of all, Germany is a tribal nation, a Volk, and there is a certain degree of togetherness and mutual concern we really don't have here.

Second, Germany is extremely efficient and frugal, and there is no such thing as tardiness, etc. They train all of their people, making sure everyone has a vocational training, and can do something with their hands, and not just with their mouth or heads. And they don't just throw people out. They even invest in their aging workers, by seeing that they use proper shoes so they can stand, and all of that.

And they also propagandize how "great" their engineering is, and sure know how to make a car finish gloss so very deep. Good chemical industry too.

I watch Deutsch Welle (DW) regularly on PBS, every evening, to see developments in Germany.
They refuse to give up manufacturing and refuse to let high wages stand in the way of penetrating Asian markets with their own domestically produced products.

Jul. 19 2011 11:21 AM
thatgirl from manhattan

germans also make ordinary, but high-quality consumer products like kitchen implements, so this isn't just about their manufacture of luxury autos.

admit that it's about overpaying at the top, and the percentage of profit american companies insist on making, year on. germans make a liveable wage with skilled manufacturing jobs.

Jul. 19 2011 11:20 AM
RJ from Prospect Hts

Of course, they have universal health care.

Jul. 19 2011 11:20 AM
Mabel from Harlem USA

I was recently in Munich and walked into a hardware store. I was astonished how many of the goods were made in Germany - from spades to nailclippers. These weren't cheap, but well-crafted and they keep Germans employed. Although "guestworkers" don't benefit.

Jul. 19 2011 11:19 AM
Matt

I was just reading about this last night. Germany has a national industrial policy. Can't really explain what that is, but the Economist can:

http://www.economist.com/blogs/democracyinamerica/2011/06/job-creation

Jul. 19 2011 11:14 AM

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