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Migeru:
the monoculture of Germany's economy, combined with low unemployment at the start of the economic cycle have already led to severe labour shortages, putting pressure on wages. He expects big wage rise this year, which will start to affects average labour costs next year
I'm sure the timing of this is just a coincidence: Thousands of highly-qualified Spanish jobseekers hoping to emigrate to northern Europe
ARCHITECTS, engineers and other specialist technically-qualified young people from Spain have been clogging up websites offering jobs in Germany with applications ever since chancellor Angela Merkel announced that the country was seeking unemployed Spaniards.

With Spain's unemployment rate at 20.33 per cent - rising to 40 per cent among the under-35s - Merkel is now actively seeking highly-qualified jobseekers from Spain to mop up the deficit in professionals in Germany's employment market.

She intended to make this public at the Spanish-German summit meeting in Madrid on February 3, but already, thousands of jobseekers from Spain are making plans to emigrate north.

So, Spanish qualified workers migrate to Germany, depressing labour costs there and relieving the pressure to reduce labour costs in Spain, which is precisely the wrong kind of macroeconomic feedback you need to set up between Spain and Germany.

Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it - Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Jan 31st, 2011 at 10:12:11 AM EST
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