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JakeS:
That doesn't necessarily prevent them from whining about it.

Of course not, but does Germany have a decent system of vocational training for these technical/manual posts any more, or doesn't it, is the question that seems relevant.

JakeS:

a game of chicken begins between the consumers of labour, and prices go up until enough consumers of labour back out

In an economy that has depressed wages over a long period and is export-oriented, there might be quite some room for wages to rise before reaching labour-market demand destruction.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 05:14:05 AM EST
[ Parent ]
afew:
does Germany have a decent system of vocational training for these technical/manual posts any more, or doesn't it
It's quite possible that the system of vocational training is no longer what it is trumpeted to have been.

Back in the 1970's there were already novels about "involuntary unemployment" among youth looking for vocational training.

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 Wed Jan 26th, 2011 at 05:26:21 AM EST
[ Parent ]
It's pretty certain that it is not what it used to be or was reputed to be. But the dual education system is still there, and Mittelstand companies train apprentices (under some constraint).

The Apprentice: Germany's Answer to Jobless Youth - BusinessWeek

Lately, though, [2009], the system has come under stress through factors related to both the current downturn and long-term changes in the global labor market. The number of apprenticeships slumped more than 10% between 2000 and 2005, recovering only after the government threatened to compel companies to take more trainees. German officials expect the number to dip again this year because of the financial crisis.

The point you make here seems to me generally valid (and spot-on concerning France, for instance), and has surely taken its toll in Germany. But the relative position of Germany in this regard would still seem to me to suggest that it takes vocational training more seriously than a good many other developed economies.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 06:06:00 AM EST
[ Parent ]
afew:
The number of apprenticeships slumped more than 10% between 2000 and 2005, recovering only after the government threatened to compel companies to take more trainees.
Did the same thing happen in the 70's?

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 Wed Jan 26th, 2011 at 06:43:09 AM EST
[ Parent ]
The only discussion I can find is in a Dutch Central Planning Research Memorandum comparing German and Dutch apprenticeship systems (1995).

The author says there was a dip in the '70s then a rise in the '80s, that cannot be ascribed to demographic factors. (From points gleaned elsewhere, it's likely to be cyclical: companies pruning back in a downturn, then catching up).

1985-1995, the author says the decline is linked to demography. Afaik the decline has continued, leading to the government intervention in the mid-'00s that re-established the situation somewhat before the downturn.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 08:31:16 AM EST
[ Parent ]
But whan unemployment is at 7%, twice the historical norm and definitely not a "full employment" level, where's the pressure to raise wages?

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 Wed Jan 26th, 2011 at 05:29:06 AM EST
[ Parent ]
If you're an employer looking for rare skilled resources on the labour market, the existence of large numbers of unemployed persons who don't possess the necessary skills will not solve your problem.

Either you are going to spend money training the unskilled, (for an uncertain future result), or you offer more wages now for workers who are likely to be immediately productive.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 05:49:36 AM EST
[ Parent ]
So training the unskilled is everyone else's problem, resulting in a decreasing pool of "workers who are likely to be immediately productive", large numbers of unemployed persons, and business complaints that the educational system doesn't train in "rare skills".

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 Wed Jan 26th, 2011 at 05:58:42 AM EST
[ Parent ]
And in increased wages..?
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 06:06:53 AM EST
[ Parent ]
That is unpossible.

In any case, without speding in in-house training you get increasing wages for a shrinking group of rarely skilled workers, chasing after whom is a zero-sum game for the firms involved.

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 Wed Jan 26th, 2011 at 06:30:24 AM EST
[ Parent ]
So, to follow you, German employers are dumb enough to obey your first point out of ideological stubbornness, but smart enough to collectively realize your second?
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 08:37:24 AM EST
[ Parent ]
Both points are consistent with narrow self-interest.

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 Wed Jan 26th, 2011 at 09:23:42 AM EST
[ Parent ]
So are offering more (in a squeeze) to hire or poach skilled people from competitors, and kicking the "human capital" can down the road bacause of the greater costs involved. It depends on how each employer defines his narrow self-interest.

If there has in fact been a decline in in-house training because of the slump (and demography), then possibly the government will need to intervene to encourage picking it up again. But that will take time. Attempting to attract skilled labour from elsewhere may plug some gaps, but it will also take time (and may not play well with German opinion).

My point is not to say the Ernst & Young report is accurate and that Germany is running into a tight skilled-labour market for middling manufacturors - I (we) don't have the answer to that. But it may be the case, or soon become so, because the availability of skilled labour is surely a limiting factor on German export expansion.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 10:25:56 AM EST
[ Parent ]
The issue here is that in-house training internalizes as a cost a societal benefit, so it is not individually "optimal" according to naïve homo oeconomicus reasoning.

Basically, if you train an employee and they leave the firm before their higher productivity has paid off your training investment, you lose out. If they leave to go to a competitor, they win without investing in the training. So it may be individually optimal not to train, and to poach trained workers from competitors. But if nobody trains, soon the industry as a whole has no more workers to hire.

The only way out of that is collective/societal, either through an industry-wide training scheme, or government intervention. Or if a given firm is large enough to have market power and to have its own large in-house training scheme which can afford to lose some percentage of its trainees early. But small or medium enterprises are not in a position to train many more than one person at a time, so to them the risk of losing a trainee is unacceptably high.

In any case, even within the same industry, there is a common ground applicable to all firms which can be taught to anyone wishing to join the industry, but then there's in-house procedures, technologies, hardware and software, etc, which will take months to learn in any case. So industry-wide training, or school training is not a substitute for in-house training.

I mean, when they say they don't have qualified computer science people coming out of the universities, are they saying people come out of university functionally illiterate (not being able to learn a new computer system/language in a relatively short period of time, on the job)?

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 Wed Jan 26th, 2011 at 10:54:58 AM EST
[ Parent ]
I don't think we disagree on the first part of your comment. As to the final question, I really don't know, but that does sound like business concern trolling.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 11:14:48 AM EST
[ Parent ]
My
self-serving rhetoric of businesses
upthread

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 Wed Jan 26th, 2011 at 11:22:40 AM EST
[ Parent ]
Yes, except that the FT piece talks about skilled manufacturing workers, not IT grads.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 11:35:55 AM EST
[ Parent ]
I mean, when they say they don't have qualified computer science people coming out of the universities, are they saying people come out of university functionally illiterate (not being able to learn a new computer system/language in a relatively short period of time, on the job)?

They're saying that the typical UK comp sci graduate knows Java and perhaps Flash, but has no experience of C/C++/etc, assembler, or deep hardware engineering - never mind clever stuff like kernel hacking or compiler design.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jan 26th, 2011 at 11:24:43 AM EST
[ Parent ]
How many firms need kernel hackers? Seriously.

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 Wed Jan 26th, 2011 at 11:27:09 AM EST
[ Parent ]
How many firms need someone with a Phd in string theory?

Actually if you're building Linux systems for business, kernel skills aren't irrelevant. You may not be building a new OS, but you will need to know why abusing the kernel or making wrong assumptions about it can cause problems.

But most employers just want some evidence of cognitive skills and task completion. They're not too worried about specifics.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jan 26th, 2011 at 11:34:21 AM EST
[ Parent ]
ThatBritGuy:
most employers just want some evidence of cognitive skills and task completion. They're not too worried about specifics.
Then what is the skill shortage about?

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 Wed Jan 26th, 2011 at 11:39:07 AM EST
[ Parent ]
They're not convinced by the evidence of cognitive skills and task completion?
by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jan 26th, 2011 at 12:54:27 PM EST
[ Parent ]
And the universities are?

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 Wed Jan 26th, 2011 at 04:04:19 PM EST
[ Parent ]
The universities are paid to be.

The problem in the UK is more that there are too many cartoon universities offering cartoon courses.

I looked up my old alma mater and the course content isn't any easier than when I did it - but the course has been extended with an additional year and now leads directly to a masters.

This seems sensible. But other unis are offering comedy comp sci with a bit of Android development and a few essays.

The differences are obvious with experience, but perhaps not so obvious to eighteen year olds.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jan 26th, 2011 at 04:15:48 PM EST
[ Parent ]
In an economy that has depressed wages over a long period and is export-oriented, there might be quite some room for wages to rise before reaching labour-market demand destruction.

Yep.

This is precisely what employers do not want to happen. Which is why they start whining as soon as the bidding war starts.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jan 26th, 2011 at 07:00:38 AM EST
[ Parent ]
So it's not whining for whining's sake, but is symptomatic of a squeeze.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 08:32:23 AM EST
[ Parent ]
Symptomatic of the risk of a squeeze within their planning horizon. That might mean that the squeeze is already here, or it might mean that they believe that there's a credible risk that it might happen a couple of years down the road.

Or they might be concern trolling for an expansion of the labour force (read: destruction of the pension system and turning higher education into vocational training) on general principles.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jan 26th, 2011 at 02:43:22 PM EST
[ Parent ]
The second proposition is pretty unconvincing, given the type of labour we're talking about here - manufacturing workers who go through some form of vocational training anyway.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 03:09:44 PM EST
[ Parent ]
These arguments may be assuming rationality where none exists.

Conservatives aren't known for their grasp of reality. They're more likely to practice frog-twitch economics - kill the economy, dissect it, electrocute it, say 'hmm' when it twitches, then throw it away and try to find a new economy to torture.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Jan 26th, 2011 at 03:21:06 PM EST
[ Parent ]
German Mittelstand manufacturors are, in general, seen as having more than a nodding acquaintance with reality.
by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 04:08:36 PM EST
[ Parent ]
Maybe technological reality, but I submit they're likely to be Austrian gold bugs when it comes to economics.

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 Wed Jan 26th, 2011 at 04:13:12 PM EST
[ Parent ]
But destruction of the pension system is right up their alley.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jan 26th, 2011 at 03:32:36 PM EST
[ Parent ]
Yeah.

It may be concern trolling, of course. But I think availability of skilled manufacturing labour is a factor to watch in Germany, since it may well cramp their style.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Jan 26th, 2011 at 04:07:00 PM EST
[ Parent ]

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