Germany is a great place to invest. So is most of Western Europe. The #1 thing you are looking for is _stability_ and a good engineering job market. Both is available.
For this kind of automated high-tech manufacturing, nobody cares about salaries. They are <<1% of the cost.
Might be true, but in Germany, the salary you pay to your employee is also about 1% of all the labor cost for him or her. Which is hyperbole, of course, but Germany is one of those countries where the actual net payout is usually significantly less than 50% of the salary the company provides.
I'm not criticising it as I think Germany is a good example of a well-working system but net salaries are low for most.
It’s probably true that the net salary is lower than some other comparable countries, although Denmark for example has also a quite low net salary.
I feel the important bit is what you get for the net salary deduction. In Germany you have:
- Free Education including University
- A decent mostly free health system, health care insurance
- unemployment insurance so your life does not completely unravel if you are made redundant and others are dependent on your salary
- elderly care insurance
- child care (could be better)
- police that is not completely reduced to the absolute minimum
- infrastructure that mostly works
All of this is not perfect by any means, but you do have the feeling to get something back for your deductions. YMMV
In some other even well developed countries it often feels like public services run on a shoestring and are just enough not to collapse.
And some public services are in my opinion easier achieved if the state runs them, like infrastructure, transport, health and welfare services or police/security. You can go with private services and the lowest bidder but my feeling is that’s a downward spiral of what you get out of it in the end.
So if you feel you get adequate services or services that otherwise are difficult to achieve I think it’s ok to have a higher salary deduction.
Obviously this is a quite subjective subject, not one sock fits all.
I would be _ecstatic_ to give up half of my salary for such a system which assures that irrespective of my employment/financial status, age or health, I'll get the care I need, until I die.
Same. For me in the states, the argument is an easy one, because the plan in the states is pretty much "sell your house to afford your medical bills even after insurance and hope you don't run out of cash before you die". Our cultural attitudes towards elder care are most glaringly obvious in our healthcare system.
There is something nice about living in a civilised and decent country.
I have learned about myself that I simply can't handle seeing homelessness and poverty every day. I want to live in a society.
Sounds great doesn't it? Too bad in reality with public insurance you get the basic care, while with private insurace (more equivalent to the US system) you get much more.
For example you can find German news articles about how public insurance doesn't cover some tests that confirm/deny if you have some life threatning condition or not, even if you have all the symptoms and the doctors says that's the next step - while private insurance does cover additional tests.
And private health insurance is only available to individuals earning well above the average German salary.
What a load of bs. Yes private insurance will give you preferred treatment in non emergency / non critical cases but that’s about it. Private insurance is luxury for people who do not want to wait for non critical doctors appointments.
Source: me, capable of going private insurance but it’s a complete waste of money.
And Germany is one of the countries with relatively good public coverage.
I am in the UK, we don't get medicine for some things because it is too expensive: HRT has been in shortage for years, we don't get most newer cancer drugs (it is unrelated to efficacy, it is just too expensive to treat people), epilepsy drugs are the same. Because drug prices here are so low, pharmacies get drugs, and then ship them to Europe to flip. I have relatives who are sick and don't get treated because it is NHS policy not to treat conditions properly (the most well-known one is CFS, the UK's approach to CFS/ME is...unique, and governed heavily by cost). And ofc, lots of money thrown into "cheaper interventions" like public health advertising (coincidentally, the people who run these campaigns are friends with people in the NHS...which is nice for them). Mental health is another area: too expensive, massive underinvestment, even today most of the mental health system is nurses who get a couple of weeks training from psychologists, psychologists are too expensive (somehow, almost no-one who studies psychology in the UK ends up doing clinical work).
There is no trade-off. Someone has to pay because doctors don't work for free. The US has a relatively optimal system with targeted universal healthcare that is heavily subsidised by the wealthy. Germany is a derivative of that system with a relatively large private component that subsidises the rest of the system. It is far better to overproduce healthcare for the wealthy, then underproduce it for everyone else. Ofc, "free healthcare" sounds very nice (unless doctors start working for free, the cost of a US public health system would largely be what it is already...Medicare and Medicaid is cheaper...but not by much because doctor and nurses, for one, are relatively well paid...in the UK, nurses make the equivalent of $25k, again no trade-offs).
The UK per-capita expenditure on medicine is very low. It's also hamstrung by the choice a few years back to balkanize the NHS (stopping financially successful hospitals from subsidizing unsuccessful ones).
My feeling is the NHS is a good institution in an unfortunate political culture. The UK is an essentially conservative state (they have been the ruling party for the vast majority of the last century) which is a poor fit for a pretty radical socialist healthcare system.
Right, but there is no concept of "financially successful" hospitals because no-one is paying for anything (success is measured in terms of input/output...the UK also does poorly here because we overpay massively for doctors, and underpay everyone else). The reason why medicine expenditure is low is because the system is managed for cost. Systems like Germany, US, Netherlands, Australia are more effective because there is a huge element of subsidy...the UK is about giving everyone the same defective product.
Also, the NHS is one of the only things on which there is almost no real political debate in the UK. The BMA is probably the most powerful lobbying group in British politics (and this isn't good, they are one of the more sources of stasis, they have opposed every change in health policy...they also opposed the introduction of the NHS). So the problem is the opposite: if anyone tries to reform the NHS is any way then the political opposition is instant (and the only way someone like Blair did reform at the edges, was to pay off doctors...which ended up costing massive amounts of money and leaving the system in a bigger hole). The main conservative force is the NHS itself...it isn't really radical, it is just a system that doesn't really work but Brits have this weird tribalism built up by tabloids telling people that someone is trying to privatize it (and btw, this is the conclusion of anyone with a brain...the NHS doesn't work well, the wealthy and middle-class need to subsidise the system more heavily but people want a Nordic size state with US taxes...and btw, what people don't understand is that we have US taxes with a public health system that is half the size of the US public health system...so we don't even do that properly). I also wouldn't call it "socialist" either, there is no real subsidy, US healthcare is way more redistributive, it is universal but lots of other healthcare systems in Europe achieve universality with large private systems...so universality really isn't the dealbreaker that people in the US think it is. But most people are die-hard NHS supporters, so it clearly isn't "socialist".
Do you seriously think there is a single health secretary or government in the last fifty years that wouldn't privatize the NHS if they thought they could?
Sajid Javid literally reads The Fountainhead twice a year - and he's not much more neoliberal than his predecessors.
My feeling is it's hard to succeed as an organization when your boss really would like your organization to fail so the free market can step in. And that's been the NHS's situation for most of its history.
Nonetheless, there are inherent inefficiencies of private healthcare, even subsidized private healthcare, in that it results in horrific paperwork multiplication and information siloing. In germany, where I live, the amount of paperwork you need to get insurance is insane. There are literally offices full of people in every city doing basically senseless work just to make sure people don't get more healthcare than what they paid for. It's also a strong reason why the UK had such an easy time doing a vaccine rollout - the NHS could just send everybody who was in x age a letter. They also pay far less for medication, because the negotiating position is much stronger.
Sure, you can't get a homeopathic suppository from your heilpraktiker, or give birth in a giant bath that's shaped like a vagina, but it delivers a good service for a low price.
No. 100% of them wouldn't. People get their views about politicians, generally, from people who are opposed to them: that person is an X, they must believe Y because they are an X. It is ludicrous. I would rely on first-hand evidence. And what people also disregard is that the UK hasn't introduced things, like patient charges, that are common in other universal systems (we have a very low income tax base, so it is generally relatively wealthy people who are refusing to pay for things they use...this isn't how any other universal system operates). So a lot of the "ideological" opposition is totally nonsensical (and has resulted in very poor patient outcomes).
The view that the NHS is being stitched up is another common conspiracy theory that is "common knowledge" and totally wrong. The NHS (and the BMA, particularly) have been given all the rope needed to hang themselves. Attributing malice to incompetence is at the root of most conspiracy theories.
An inefficient system that achieves patient outcomes that are many times better than the UK. I would take that any day. It is great to sit in a country that can provide good healthcare and marvel at ideological purity (it isn't ideological purity, it is conservative/reactionary thinking that drives everything in the NHS)...it is less great to actually be in that country, and be sick and not get treated. The UK achieves good outcomes given the cost...but that cost is very low and the outcomes are also very low (the UK's healthcare system is more comparable with middle-income countries, we are nowhere near most developed countries...and nowhere close to a top rank country like Germany). And btw, the UK is massively inefficient...we overpay massively for doctors (our wages are roughly equal to Germany), there are reams of middle managers in the NHS, any system will have inefficiency (and it is far more dangerous to have inefficiency in a system that isn't redistributive like the UK because it is largely poor people who pay for it).
And no, it isn't about insufficient homeopathy. I don't think people who have healthcare understand what it is like to have none. I am sick right now, I don't get treatment (in one case, the waiting list is too long, and in the other the cost is too high for the NHS to treat people). Most of my relatives that are sick, have either had bad treatment at one point that has almost resulted in death (in one case, multiple times) or don't get treatment for anything but basic illness (and then it is usually bad: for example, doctors will prescribe insulin for overweight people with type 2 diabetes because actually getting people to lose weight is too expensive...the UK also loves "public health" programmes because they are cheap, they don't work either but they are cheap). You call up for emergency treatment, you will wait 6-12 hours for help, and when you get taken to a hospital you can wait as long as a day to be admitted (most stats that are reported on this are fake, the hospital local to me has always hit their four hour target, I have waited in their four hours when it has been totally empty...it was recently discovered that all their stats were being faked by management). If I need to speak to my GP, there is so much demand that I need to call at 8 in the morning, by half 8 there are no more slots. If I do call at 8 then I will be triaged by someone with no medical training, and likely told that I can't speak to anyone. If you do go to a GP, you likely won't get referred to a specialist if the cost is too high (a big category here is mental health, people usually come into the system only once they attempt to kill themselves/have a psychotic episode/etc.). If you do get referred, you will likely be waiting months or years. If you need medicine, it will be low-cost and anything complex is either not available at all or is sold into markets like Germany with higher drug prices by UK pharmacies (for example, most cancer drugs aren't available...it is why the UK has the worst stats on cancer treatment in the developed world, by far...same for epilepsy). And the vast majority of GPs are exceptionally bad at their job. I have moved around the UK, I have had maybe 10-25 GPs, most are clueless...as an example, I know someone who had a stroke, and the GP wouldn't refer to a stroke clinic (and btw, because obesity/strokes are so common, they just give you drugs because everything else is too expensive). I don't actually know anyone who has had a high level of contact with the NHS who has a positive opinion of the level of care (this includes people working for the NHS too btw, the support that people have is mostly theoretical...until they get sick, and realise how bad it is).
I am aware of the meme about German doctors. But what you don't see is that waste is a sign that things are working (and btw, the UK still wastes more than anyone, I am in favour of wasting money on doctors...if the outcomes are there, but they aren't and nurses get paid starvation wages because of this overspend). If you attempt to reduce all waste in healthcare, people die. It isn't like other things.
Even if you take the gross salaray it is MUCH lower than what the company actually pays. Last time I looked it up, the company pays about as much in insurance, taxes and such as your gross is.
That’s still an exaggeration. Non-wage labour costs are about 21% of the gross salary with most of them capped around 80k EUR of gross salary (meaning the employer pays 21% of 80k even if you make 200k). FWIW this includes health insurance.
Now you do you have to count with some other potential expenses, like covering up to 6 weeks paid sick leave. I’m spire there’s some rule of thumb how to average that over a workforce but I’m not aware of it.
You either pay a lot for private insurance (especially when you get old) or you pay a lot for state-backed insurance (which is a lot if you earn above average as most techies do).
Since insurance is capped at around 5k salary you will at most pay 15% of that (750 EUR) for health insurance per month in the universal insurance system. If you make higher salaries then you won't be affected.
Is that 750 EUR for an individual or a family? Sounds like a lot.
For comparison in California, a 35-year-old SF resident earning $250k/yr living alone purchasing insurance through the public marketplace can get a Platinum-level Kaiser Permanente HMO plan for around $650/mo (but over $2000/mo for a family of four).
YMMV but I've found KP's service quality to be extremely high, and that plan comes with $0 annual deductible and very low copays.
It's 14.6 % of the gross income, capped around 58k income / year. Half of that (7.3 %) is paid by the employer, the other half by the employee (deducted from monthly wage payments).
For that, kids (no matter how many) are covered unless the other parent has a private insurance. Spouses are covered if they don't have their own insurance.
Based in Germany, I'd say the best part of it is that it's truly social: The healthy ones pay for the sick ones, all with the same tariff, no questions asked. That's especially true for people who become sick, old, or both: For them, private insurances tend to raise their tariffs exponentially, and there's no way to get an affordable insurance any longer.
Ah, so more like 350€/yr, including all dependents, for an employed person. That is a much better deal than (self-employed) KP, assuming the quality is good!
No, nowhere closed to that. There seems to be some confusion because Americans tend to quote things in yearly rates, while Germans tend to quote things in monthly rates. I pay just over €10k/year for my public health insurance in Germany, which is the maximum rate. (I'm self-employed, so I pay the full rate.) But that covered my whole family (wife and two kids) when my wife wasn't working. Now that she's a full-time employee, she pays around half of that (because her employer pays the other half).
Ah, ok. Thanks for the more apples-to-apples comparison. Sounds like the high-end California equivalent would be around $25k/yr, more than twice as much for a high-income self-employed head of household.
- There's no co-pay on anything (with some exceptions for higher-end elective dental work, e.g. if you want an implant instead of a bridge). What something costs is never a factor in treatment. The doctors simply decide what they think is appropriate.
- Prices, again, at the same coverage level, drop down to next to nothing if you have no income. I paid €1,400/year when I was living on savings and starting my company.
Fascinating! Thank you for sharing those 2002/2003 articles. For completeness, it looks like a 2004 rebuttal claims that this is due to a healthier population: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1266198/ but frankly that does confirm that relatively healthy, employed populations would prefer Kaiser to the NHS.
> Since insurance is capped at around 5k salary you will at most pay 15% of that (750 EUR) for health insurance per month in the universal insurance system.
Does the employer pay any of that? Is that the total for the entire family?
Yes, it includes your spouse and any number of children up to the age of 26 I think. So the classical family model with a stay-home spouse and children will be covered by the breadwinner's health insurance.
If any family member works full-time, then they have to cover their own health insurance. Exceptions apply.
If you make more than 40.000 EUR / year you have the option to get a private insurance policy with more "benefits". Then, the employer will pay out the amount that went to the public health system and you will use it (and whatever you can afford on top) to your private health insurance.
When you go private, you're in the wild west, meaning you'll need to be extremely cautious of what contracts you sign. Or you'll end up with a 3000 EUR per month plan at old age, with no way back into the public system.
Many people end up poor after retirement because their whole 401k and savings go towards the health insurance which is way to luxurious for their needs and isn't capped.
Yes. Which ... I am sorry is not "free". We can argue about it being cheap or not cheap or whatever. Sure.
But I don't get why I got downvoted for pointing out that it's not free, when that's 100% true.
750EUR public (which doesn't cover everything) or depending on age anywhere from 400 to 1500EUR private isn't "free healthcare". That's on top of high taxes etc.
Germany has a lot of great things. Free healthcare ain't one of them. Let's stay honest.
I don't think anybody says it would be free (what is free except air and love anyway?). But it is universal and also available if you are not working, are unemployed or retired. If you are not earning any money, then you still receive the same level of care.
You are right that it doesn't cover everything, but in my experience these are primarily things where there is a high level of own influence or electivness (dental implants, lasik, glasses) and or cost/benefit isn't proven. Since a basic level of care is provided I don't mind that.
Germany has free schools, universities, low cost good child care, a relatively good health infrastructure, and more. Some regions do not even need debt any more to finance all this. The high taxes do not just evaporate, but sure could be used more efficiently.
If I'd have the choice between US and Germany, I'd probably prefer the old Europe model.
Eh the salaries are alright. It seems to me like the salaries are higher in America, while in Germany they're lower but include things American end up paying for: pensions, insurance, and education.
If I were American, a part of my net income would still end up going to health insurance, student loans and other things. My employer might pay less benefits, but pay a higher salary to compensate for those costs.
I think that a direct comparison is very difficult in that regard. That doesn't even include different expectations regarding work life balance, and legal requirements regarding parental leave and sick leave.
> Eh the salaries are alright. It seems to me like the salaries are higher in America, while in Germany they're lower but include things American end up paying for: pensions, insurance, and education.
While that's true, above-average earners like engineers/doctors/laywers definitely come on top in the US. Also for most of these people health insurance is paid for by the company.
The trade-off is for everyone else basically, who get a much shittier deal in the US compared to what they would get in any EU country.
I'd still consider quality of life because of vacations, sick days and parental leave.
Skilled US jobs pay more, no matter how you look at it. I'm just thinking that above a certain income level, other perks become a lot more valuable.
I have nearly unlimited free time now, and you'd have to drag me back kicking and screaming to an office. Even if you doubled my salary, I wouldn't go back to 2-3 weeks of vacation like my parents back in Canada. The extra 3 weeks I got when I moved to Germany were life-changing.
There's are also finer points about the differences in work culture, but that's not really a guarantee. There are plenty of overworked Germans, even if they're allegedly rarer.
It's really hard to compare what amounts to different values. It's just important to understand that total income isn't the only thing employees are chasing, especially if it involves relocating to a different continent.
US employees also commonly have health insurance, typically covered by the employer in the tech field (or any median+ full-time job). Somehow foreign posters on HN constantly fail to recognize this fact. One would think after more than a decade of it commonly popping up here, the false narrative would stop (and it's corrected in every thread where it comes up).
It usually goes like this:
US tech salaries are great, but you have no health insurance. Or: yeah but you have to pay $12,000 per year for your own health insurance, so you have to deduct that to get a fair accounting on salaries.
When the reality is: if you work in tech you're likely receiving good health insurance coverage from your employer, and you're simultaneously paying lower taxes than in Germany.
Which is another way of saying that US salaries would be even further beyond peers if one takes an accurate accounting of the health insurance benefit + taxes.
Once you go through the effort of pointing all of this out, then they'll revert to: yeah but the quality of life is still superior so there. Having watched that forever process here across more than a decade, I've learned that people - even intelligent, seemingly knowledgeable people - often just shoehorn whatever lies or false narratives they need to feel good about their context when they lay their head on the pillow at night. And that's why no matter how many times it's corrected, the false narrative in question will never end.
> When the reality is: if you work in tech you're likely receiving good health insurance coverage from your employer, and you're simultaneously paying lower taxes than in Germany.
Just the fact that you need to add the "in tech" to me suggests that US system isn't that great. It's pretty good, assuming you're in tech. The other problem is that when you look at your W-2, you can see how much your employer pays for your health insurance - this is the amount that you should also treat like a tax, even if you do want to add it to the total comp (it's money your employer spends on you that you don't get to see). The fair way to compare wages & tax rates would be to look at the total cost of employing a person vs how much of that money this person actually gets. And even then there's VAT & sales tax that needs to be taken into account...
Are there any sites that attempt to do those kinds of analyses / comparisons?
> When the reality is: if you work in tech you're likely receiving good health insurance coverage from your employer, and you're simultaneously paying lower taxes than in Germany.
As long as you don't get fired and as long as you don't get sick. But yeah. If you are young, healthy and in tech you have good health insurance in the US. Congratulations.
So, maybe, when we foreigners talk about this aspect of the US healthcare system we understand completely how it works and just don't see it as equivalent.
Yet how many people, even well-educated ones, have this balanced view on salaries? Most people see the bottom line on their pay statements. They "conveniently" forget that they still have to pay for health insurance, pension funds, etc.
A big figure on the pay slip is a status symbol. If Germany wants to attract foreign high-profile human capital like the US does, they should create a similar system: Pay them their full salary without deductions, and then charge them the mandatory cost instead of their employers. It could work wonders.
You opine on a system you clearly don't understand.
Each of these deductions are clearly shown on your pay slips. They can be calculated in advance from your gross income.
In the end, the amounts you pay (reduced by half because of employer contributions) are relatively low.
In any case, it's impossible to have a balanced view on compensation, because of the huge differences between the countries you compare. I lived 6 years and Germany and the rest of my life in Canada. I still wouldn't venture to compare what a salary means in either country.
Maybe I wasn't being clear enough. What I meant was to simply hide the deductions on the pay slip. Or go one step further, do not deduct them from the salary at the time of payout, but just postpone them and deduct them from the receiver's bank account (and make the bank responsible for making sure he doesn't send the money to Switzerland before it happens).
So the employee sees the huge number being transferred into his account. He can go on the internet and brag about how great salaries in Germany are.
Also, you are wrong here: "Reduced by half because of employer contributions". This only applies to very specific insurances like private pension funds, where there's a split.
Costs for health care aren't split like that, the employer deducts the full amount.
"In the end, the amounts you pay (reduced by half because of employer contributions) are relatively low."
I typed 100k/year into brutto-netto-rechner and it shows that Netto is less than 65k. Basically over 35% of your salary gets confiscated by the state, of course this doesn't include further taxes like 19% VAT you pay every time you buy anything at all.
I hear this a lot about social security in the US as well, that it will fail. I would characterize it as degrading instead of failing. If the workforce declines there will be fewer payers into social security or pensions, then folks paying into social security will have to pay more, recipients will get fewer benefits, or the government will print money
It is not a "Ponzi scheme" at all, rubbish. The pension system is not an investment theme. Currently working people provide for current pensioners. No "investing" involved. That, in the light of a shift in age distribution, this works better when the economy and productivity grow is orthogonal, the pension system payments are not for economic growth but directly for current pensioners.
Unless you find aliens or a time machine to shift goods and also services through time, always and everywhere the currently working take care of the current pensioners. There is nothing "Ponzi" about it, that is the universe.
People who pay now do not pay for their future pension, they pay for the current pensioners. What is transmitted to the future - when they become pensioners - is not what they pay now, it is merely information. That information is then taken into account when the then living and working working people pay the pensions of the then pensioners. The information about how much somebody contributed in the past is taken into consideration to see how much a share of the overall pie everyone gets, but the pie itself always is created in the present by whoever works now.
Which also makes the headlines a little silly that claim that because in the future there will be more of an imbalance between nr. of people working and those getting a pension something needs to be changed now. It makes no sense: The current payments into the system immediately go to the current pensioners. If there are less paying and/or more receiving the funds that can and is always balanced at whatever the current time is. There is no need to do anything now when the current payments are enough to pay the current pensioners. If next year there is an imbalance they adjust what the payments (in and out) are at that time. It makes no sense to change payments now when the problem is not right now.
Any finance-based scheme cannot undo the universe (except, aliens helping out or time machine). "Private" funds change nothing of the underlaying truth that current pensioners live from what current workers produce in both goods an services. It only changes who is responsible: More winners and losers (and then "it's your own fault, why did you not buy stocks - the right stocks too of course") with the finance based system, with one huge winner the financial industry.
This also applies to private retirement investments. My comfort in retirement is contingent on the economy, and hence, the stock market, growing. If the 'ponzi scheme' of limitless growth collapses, I'm not going to be any better off than the pensioner.
I'm not sure that any public pension systems in any way satisfy the definition of a Ponzi scheme. While public pension systems may be flawed, in no way are they fraudulent or otherwise non-transparent at the very least in democratic regimes.
A well-working system? Germany only has an income tax but no wealth tax, unsurprisingly there's a huge inequality in wealth. If you earn your living in Germany through work you are basically a sucker: You have to hand on average 38.9% to the state. Taxation on capital gains, interest and dividends is 25%. This difference is compounding every year so the net effect over a lifetime is huge.
It's comparable to the US. If you look at the roster of billionaires in Germany, and then look at their national median wealth figures, it's stark.
Klause-Michel Kuehne scaled from Germany's economic size to the US economic size would go from $37b in wealth to $195b. That's Jeff Bezos.
Dieter Schwarz scaled similarly would go from $26b to $135b. That's Bill Gates.
Susanne Klatten scaled similarly would go from $24.6b to $128b. That's Zuckerberg.
Thomas and Andreas Struengmann scaled similarly would each go from $21b to $109b. That's Warren Buffett.
Stefan Quandt scaled similarly would go from $21b to $109b. That's Steve Ballmer.
And so on. Germany has 30 of the top 500 largest individual fortunes globally; the US has 159. Interestingly that's the approximately correct scaling if you account for the difference in economic size (although one would expect it to increase even further with scale, and given the US also has other things in its favor (eg global reserve currency, military superpower); so Germany is more than pulling its weight in relation to the number of US billionaires at the top). Overall Germany had 153 billionaires as recently as 2019, while the US had 788 that year; once again that scales roughly correctly for the difference in economy size.
So yes, the incredible wealth at the top in Germany is every bit as lopsided considering the size of the German economy.
Germany's median wealth figure is below the US. That's despite the US massively debasing its median with tens of millions of poor immigrants from Latin America over the past 40 years (meaning those people are starting from scratch, typically with no valuable labor skills or education background, and often without even knowing English). Comparing apples to apples, US demographics to Germany demographics, US white people are drastically richer than German white people at the median. And it's also despite the US not having the much vaunted labor protection that the Germans enjoy.
Germany, given its immense economic output, relatively stable culture and politics, high productivity, and strong labor protection, should have extraordinary wealth at the median. It doesn't (France and Britain both far exceed Germany in that regard; Germany is only slightly ahead of Portugal by comparison).
By well-working system I mean there are still enough checks and balances in place to make the rise of a figure like Trump or Putin very unlikely. And this of course is tied to economic well-being.
Well, they could use a term limit for chancellors. The position is not as powerful as the US president (the term limit is really the most important check to the president's power), and most people will agree that Merkel did at least a decent job during her tenure, but long office terms tend to fossilize the political system.
(Ignoring the comparative suitability of European countries) It bears mentioning that TSMC and ASML are fundamentally different businesses in terms of their clientele, costs, inputs, institutional knowledge, sales volume, and other key characteristics. They operate at very different stages of the semiconductor supply chain.
The Tesla story had two sides - Tesla was aware about the high standards that would be applied to their factory, but somehow thought "we're Tesla so they'll create all kinds of exceptions for us if we pay the right politicians".
Turns out not every country is as corrupt as Tesla's home country.
> we're Tesla so they'll create all kinds of exceptions for us if we pay the right politicians
Based on what? Tesla makes extensive use of an existing capability to move on development with per-approval.
They have not received any kind of politicians helping them to avoid bureaucracy that I know of. Some local politicians have talked in support but the bureaucracy is just moving at its normal pace.
I guess they paid a fine for installing a few tanks to early but that seems like a planning issue, not some kind of 'we gone install the 2 tanks because we have political backing'.
Its not like the plant is majorly behind.
> Turns out not every country is as corrupt as Tesla's home country.
Again, based on what? What corrupt thing did Tesla do in Texas that is so different? Texas doesn't require a public meeting for input but the overall process is not actually that different.
Maybe the standards are different, but it doesn't have anything to do with corruption.
There aren't any competitors in the state, and there has been basically no politically influential pushback, so that line of argument doesn't really make sense.
There is no overt pushback. That doesn't mean that there is none. And the presence and activity of the usual environmental NIMBY organisations like Deutsche Umwelthilfe, NABU, BUND, etc. point to at least some covert opposition, since those organisations happily serve as fronts for non-environmental interests.
And state politics, especially in the east, is rife with people using it as a stepping stone to the federal level. Famously there once were more prime ministers from the west governing the east than eastern-born ones.
Since it is about corruption, of course there is only wild speculation. Maybe in 20 years someone will confess in their posthumous memoirs or something. Until then, there is only speculation, inference and the recognition of parallels to cases in the past.
I mean, if the options are (a) a grand corrupt conspiracy or (b) Tesla turns out to be bad at doing a thing, I think Occam's razor would suggest (b), especially given that it's _Tesla_. This would not be their first rodeo with screwing things up.
Oh thats so not true. The Brandenburg (the state) Ministerpräsident (like Gouverneur) and his team really like to be a big car producing Bundesland. We have Baden-Württemberg (Mercedes, Porsche), Bayern (BMW, Audi) and Niedersachen (VW HQ) and to some extend also NRW (biggest EU plant of Ford) and Sachsen (VW plant). But there is not a single plant Brandenburg. So to be in the game is something they really wanna happen. Especially with something that hyped like tesla. But still there are rules, and you have to follow them.
Yes, and I remember that the people watched the project with a skeptic eye. It was neither pessimistic nor optimistic, just cautious. It's just an impression though.
I don't think there is any other car factory in Brandenburg. So there would only be interference from the federal level down. Which wouldn't matter that much in my opinion.
They don't have to buy politicians, because every politician knows that Germany's economic fate is directly tied to them. Which isn't the case for Tesla and never will be. German auto manufacturers long know that the real competition for E-mobility isn't Tesla.
The Tesla story is widely exaggerated. So far they have gotten basically every approval they asked for quite quickly. Local politics is quite supportive of the project, because it brings a lot of jobs in an industrial-weak region. It is also not clear that the project has actually suffered any significant delays beyond some of the time plans being overly optimistic.
There has been some attempts to block this project from some environmental groups and some groups posing as environmental, but their their injunctions have been quickly cast away by the courts. It is also not clear to which extend Tesla changing their plans in flight have created some delays. As the system works, some of the plan changes do reset the approval process to some extend.
While the original plan seemed to aim for starting production without a local battery plant this summer, there is no sign of starting production yet. On the other side, they already started to build a giant concrete foundation for what looks like a battery plant, this might come much earlier as initially planned. And this proceeds, like most other parts of the factory, at a very quick speed.
Germany has strict environmental regulations, but most places in the world have those by now. As long as you plan to fulfill the regulations, there should be no reason not to build in Germany.
> There has been some attempts to block this project from some environmental groups and some groups posing as environmental, but their their injunctions have been quickly cast away by the courts.
Tangent: how can environmental groups be against an electric car manufacturer? You would think they’re somewhat fighting the same fight?
A couple of general examples why environmental groups may have concerns, none specific to the Tesla story in particular, but I know have happened elsewhere:
- The location has a unique/endangered flora or fauna and building in the specific location would be a significant blow to those species.
- Ground water issues when a large area is paved, roofed or otherwise covered.
- Increased traffic though connecting roads causing related issues.
It's as far as I see never about the specific industry building in the place, but rather the local effects of building in the area that need to be addressed.
Quite a few environmental groups have explicitly expressed support for the Tesla plant, as they see it as a net win for the environment.
Those groups which are protesting seem to have very one sided view. They oppose any change of state, even if the trees that Tesla did cut down for the buildings were scheduled to be cut down for wood in a few years anyway. And Tesla financed planting of new, more varied trees in other areas. And some groups definitely are just pretending to be environmental while driving a political agenda.
They are building a factory as fast as possible, pushing the authorities to work as fast as possible and until now they only had minor difficulties which each other, considering how hard Tesla is pushing and how "slow" German bureaucracy is.
Chip making is relatively clean: sure, it uses nasty stuff, but it's nicely contained and cleanup/recycling is part of a fab. Fabs also aren't exactly a new thing in Germany (XFab, Globalfoundries (formerly AMD), ...)
And the Tesla story of ... Tesla getting quite generous permissions to rush-build a factory, Tesla rush-building the factory, sometimes going over what#s permitted and thus having some minor squabbles with the local authorities? That "story"?
Tesla's problem, from the outside, looks like they didn't ask for expert advice, or ignored it if they got it. Which seems to be a recurring problem with Telsa in technical fields, but it's interesting that it comes up in business and regulatory fields.
What problem? What could they have avoid if they had asked experts? I have been following the process in a lot of detail, as I speak German. I have no idea what you are referring to.
One issue is that the factory is located within the boundaries of the Wasserschutzgebiet Erkner/Neu Zittau, which means they have extra strict environmental safety requirements to avoid contaminating the water.
That seems like it could've been avoided, since Brandenburg doesn't have that many Wasserschutzgebiete: https://maps.brandenburg.de/apps/Wasserschutzgebiete/ (The WSG Erkner/Neu Zittau is the big blob south of Erkner, southeast of Berlin. If you zoom in far enough, you can see Tesla's factory at the blob's eastern border.)
Telsa knew very well about the Wasserschutzgebiet. The additional measures you have to take is not actually that relevant or expensive.
The location they ended up with, was suggested by the government of Brandenburg. It was one of a few locations.
And selecting a location has many, many, many factors. Tesla simply decided that the extra cost for that environment was less important then the other factors. Such as transportation infrastructure and likely many others.
Simply suggesting that they didn't know what they were doing because of the location they picked is not really defensible.
We also have no indication that the regulatory approval is delayed because of that specific issue.
Even if you care about salaries, German engineers are cheap. If you are looking for the best engineers they are as cheap as India (India has a lot more bad engineers for cheap, but they have plenty of good ones that demand and get a good salary).
The real downside of Germany is lead Engineer is a non-union position so you end up with the majority of your engineers refusing to lead the project (despite the higher salaries, the union benefits are considered worth it - as an outsider I don't know what these are). Thus you end up with a lot of great mid-level engineers who try to stick to their own area of expertise instead of growing to make a better whole.
Why you think that Germany has a lot of good and cheap engineers? I think the biggest problem that low salaries are causing there is that people with some(5+ years) experience are moving either to Switzerland/US or to freelance for Switzerland/US companies.
So, there's big deficit of experienced engineers. German companies are trying to solve it by inviting Eastern European/Indian/Asian workers, that are cheaper, but that results in mediocre one staying and exploiting job security system and good ones moving to Switzerland/US or back to native country(where foreign experience can help them to get to higher managerial positions).
They are low compared to the world. However moving is NOT easy for personal reason. If you are going to move from the countries you listed Germany is going to be easier just because it isn't as hard to get back to visit family.
Is that true even if sum up higher taxes and cost of living in Germany? At least in Eastern Europe(specifically Russia, Belarus and Ukraine), average salary for mediocre software engineer is about 3k$ per month after taxes which is already comparable with German average SE salary. But cost of living in EE is a lot cheaper, apartments in Moscow are 3 times cheaper than in major German cities. Food, on average 2 times cheaper and transportation(taxes, public transport and fuel) sometimes up to 10 times cheaper than in Germany.
This. Quality and extended costs of life are definitely vague but important aspects when considering a move to Germany. There is no perfect lunch let alone free lunch.
Cost of living in Germany isn’t significantly higher than other western European countries. And for engineers, after-tax income is easily 50% higher in Germany compared to the countries I mentioned.
As I said, the union has enough benefits that the value of higher salary positions isn't worth it to many. In the union you are not allowed to work more than 36 hours a week (I might have the numbers off a bit?) and they check to ensure that. Non-union can work longer hours, in practice they don't, but they are allowed to. There are a number of other things like that, the one lead engineer I work with in Germany doesn't think they are worth it, but the majority do.
The above is about great engineers who are holding themselves back. I have no doubt that those who are willing to not be in the union are also willing to leave the country leading to some brain drain, but many are also holding themselves back as well.
What's "the union"? I never heard about it. Not a single engineer that i know personally is in this union(or at least they are hiding that). And literally all of them planning to leave Germany once the good opportunity arrives. Also, i know personally almost 20 engineers who left the country only for better pay and that's during pandemic only.
Many German companies (BMW, Siemens, Bosch, BASF, ...) historically cooperate with unions like "IG Metall". Unions win benefits for their members, but companies usually pass these benefits on to all employees. These benefits typically include: 35-hour work week, regular and performance-independent salary increases for all employees, at least 6 weeks of vacation per year, parental leave beyond the legal minimum, training and job placement if your current job is eliminated, etc. If you are a developer working for one of these companies, the union contracts will always affect you, even if you are not a union member.
It is hard to tell if you are in a better or worse situation as a developer when you work in such a company. Many employees in such companies would like to have a 40-hour week, because that would result in higher pay. Unions, however, push to allow 40-hour weeks only to a small percentage of the workforce on the grounds that if the workload is higher, it should be compensated by new hires instead of overtime for existing employees, since more employees also means more union members and thus more power for unions.
Depends on the industry, different industries get different unions. I believe the ones I work with are in the steel workers union, but since I don't live in Germany I'm sure. I just know they find their union worth it.
I think the reason why some Germans think it's a bad place for companies is the bureaucracy. Any time you want to build something, the NIMBYs come out, find some sort of protected frog, and your project is on hold for an extra 5 years of paperwork on top of the basic 3 years.
Now, this may be a complete misconception, but that's what my perception of doing business in Germany is.
I wouldn't be as harsh, but indeed that decision is a bit weird. They cannot really count on cheap labour, or "friendly" economic incentives. And seeing the case of Tesla factory, it's not so easy and fast.
One great thing about Germany is the central location within EU with good logistics overall. Not sure it matters for semiconductor manufacturing.
I wouldn't say Teslas Brandenburg factory shows a problem with red tape per se, but it does show that ignoring it won't save you time in Germany.
Also, salaries usually only account for low single digit percentages of opex in high tech production, so ready availabilty of the needed specialists is probably more important.
For those companies involved in semiconductor industry, where machines cost 100M usd EACH... People are just a rounding error. Should we hire 100 more? 1000 more? Whatever
Keep in mind that for a high-profile engineer or lead who expects to make 400k at least per year, the company would actually have to pay him 800k to make that much net. Labor cost in Germany is sky high.
That times a thousand is not insignificant.
I assume they mean 400k net, if the employer pays 413k you only get 206k after tax. While the tax burden seems huge in this case, it's not that different in the US, though. For example you'd get around 225k in California (with no deductions).
Yes, if you get 400k gross, your employer has to pay 413k, but you only get 221k net after deduction of taxes and obligatory insurances (according to that very same calculator).
To be precise: 400k or higher is a salary only paid at the top 30 (Dax companies) to C-Level executives.
If you own the business there are other tiers of compensation available, but employees in Germany very rarely make more than 150k in any position. CEOs of medium sized businesses up to 500 employees would likely not be compensated more than 200k. Other C-level even less.
$800k/year in San Francisco as a single is $436k/year net. In Germany that’s $431k/year net.
You should argue with lower (more realistic) salaries. Social insurance (including health insurance, pension) is capped, meaning if you earn above a certain level you won’t have to pay any more. This means that those aspects play a diminutive role (about $15k) at your named salary level.
No, there are only very little payments beyond the pay check. The employee does of course only get payed out a large part of the pay check, the rest goes to taxes and social insurances.
Taiwan as a country was not allowed to buy vaccines (since China views them as an administrative sub-unit, Taiwan should not be engaging in international relationships from their perspective) and are still getting hit hard by COVID. At one point recently TSMC itself was negotiating with an EU pharma company for vaccines (to be purchased through a Chinese intermediary) as a proxy for the national government (due to the aforementioned "china says we're not a country" politics) and I wonder if these two things aren't linked. Give us a fab so we aren't wholly dependent on Taiwan for supply flunctuations in our automotive industry, and we'll grease the skids with China and make sure you get your vaccines.
I guess arguing against that idea is the fact that Japan also got a 28nm fab recently and I dunno if they've done anything particularly special for Taiwan lately in return.
But up until recently TSMC was very much "negotiating via the press", protesting that Germany was not a good location due to lack of supply chain, etc (despite GloFo having the Dresden fabs nearby and all - certainly not cutting-edge anymore but they are 14nm/12nm fabs, they aren't chopped liver either).
There clearly has been a sea change lately though with TSMC and their policy regarding fabs outside of taiwan. The US got a 20k wafer/month fab (later upgraded to a 100k wf/mo "gigafab") based on the cutting-edge 5nm node, which would have been unthinkable even a year ago. Japan got a 28nm fab for their automotive industry as well. Clearly the chips shortage has been a factor in all this but particularly the change in position on the 5nm fab is pretty stunning - the exclusivity of TSMC's cutting-edge nodes in China is effectively part of their national-defense strategy and there must have been some pretty good trades made in order to get that fab in the US. That is not an automotive fab and it's completely contrary to the well-established policy of TSMC never to let their cutting-edge nodes outside Taiwan to use the potential damage to the world economy as a suicide bomb should china try to invade.
> done anything particularly special for Taiwan lately in return
Hinted they might come to TW aid in event of invasion.
> some pretty good trades
Or coercion. Subsidies and vaccine diplomacy are good carrots, but TSMC is wholey dependant on US/EU tech and JP supply chains. Push comes to shove, US/EU and even JP will get their fabs. Only US has enough leverage to get the crown jewels. Even US weapons sales aren't scheduled to be delivered after fab completion. Though one has to wonder if these expansions are serious, whether TSMC/TW will try to delay/undermine for national security.
In Silicon Valley, you can find a dozen 600k$ engineers relatively quickly to scale up a random startup.
In Germany... the salaries these people would be making would be < 100k$ because they are engineers, not managers. For some reason the only way to slightly increase your salary in Germany is to become a manager, but good luck with scaling up a start up by hiring 12 managers that don't have anybody to manage.
This disparity in the valuation of top engineers cause many to emigrate, and once you are in the US, it is impossible to financially justify taking a 5x pay cut to go back to Germany. (You can justify it "non-financially", but these other justifications would need to offset the 500k$ yearly that you are leaving behind).
So... finding top talent in Germany is hard. If you were to find them, hiring them would be 2x more expensive than in the US. Which makes a good that's very expensive, twice as expensive.
This is one of the many reasons why the startup scene in Germany is poor. Nobody wants to be the engineer that actually builds the stuff, everybody wants to be a "manager".
It turns out that many of the engineers that get to build the stuff become excellent managers once the company grows because they know it inside out.
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TL;DR: if you are a tech company that needs top engineering talent to grow a super high tech facility up, you can't find enough talent there, and the one you find is twice as expensive as somewhere else.
As others have mentioned, the price of talent is insignificant for TSMC compared to the price of their machinery, so they can afford the 2x increased costs, but the lack of talent is harder to offset.
I don't know of a single person in my Master's degree class in Computer Science in one of Germany's top tech universities who went to the US. And I have most of them as contacts on LinkedIn. I'm not buying your premise.
Anecdotal evidence: I did my BSc, MSc, and PhD in Germany.
None of my PhD colleagues (from my and other top3 tech universities) is still in Germany, they are all in the US, except one which is now a Prof in the UK.
Most of my BSc and MSc colleagues are still in Germany, some spreaded out through europe, and few to the US.
Its pretty hard to some of us actually have work-related conversations with old friends still in Germany. They always ask about the salaries in the US, and guess something "absurd" like "you are probably making more than 200k$, 250k$?", to which the only thing you can actually say is "yes" kind of in shame, because making >500k$/year is "absurd"/"beyond imagination" by German standards.
We have all worked in Germany in industry before moving to the US (both internships, but also between MSc. and PhD, or briefly after the PhD), and there is just no comparison about the quality-level of the work and intellectual-growth in the US and Germany.
In my German employer, our 15 ppl team was 2 PhDs, and many MSc, all from different skill levels, doing a good job, etc.
In my US employer, our 50 ppl team has > 40 PhDs, couple of Stanford / MIT / Berkley / .. ex-Professors, pretty much all of them infinitely smarter than me, all giving me feedback, punching holes through my work, discovering my flaws, and teaching them to me, etc.
The difference in the amount of stuff you learn per day of work, the quality standards, etc. between both employers is abysmal.
I know several that went to FANGs from TU Darmstadt and are in the situation as described by parent. They even feel socially isolated from Germany as their salaries and wealth are incomprehensible to their former friends and so are met with envy.
Personally I regret not leaving Germany earlier, it's much harder once you have kids.
I know almost 20 engineers personally, who moved out from Germany, only because of low pay. But all of them were expats in a first place. Not all moved to US, some to Switzerland and some back to home country(for higher managerial positions).
Money isn't everything to many. Life in Germany is good enough, and there's no guarantee that it would be betted in the US. Sure, more money is nice, but the pay in Germany is still decent, and the perks are considerable: 22% fewer work hours, for instance.
It's not, and that's perfectly fine from a societal standpoint, but people who are worried about working 22% fewer hours and are fine getting a "decent" salary are not the engineers you want to hire when trying to bootstrap a new enterprise.
They can run your company steady-state, but they are not going to build anything internationally competitive.
Not in IT, but Germany has quite a few market leaders in "old tech": Cars, logistics (DHL, Schenker), retail (Aldi, Lidl), and a whole lot of B2B niche products.
IT isn't a fair comparison, no country in the world can compete with FAANG right now, that's hardly Germany's fault. And still, there's SAP and Deutsche Telekom. Telekom has 50% of Google's revenue. Sure, the market cap is another story, but still.
China is 100% competing with FAANG. India has a lot of close-second competition.
Most of the companies you listed were founded before 1950. That's not at odds with my thesis -- these engineers can continue to drive an already-successful business but will not be able to start something genuinely new.
I'm fine with that. I value employees having balanced lives more than GDP bragging rights.
For the record, yes they're the sort of engineers I'd want to hire. If we're making broad assumptions about a country's workforce, I'd want a happy, well-rested workforce that's not held hostage by their company's health insurance plan.
You say that as if valuing your free time is a sort of moral weakness in an employee.
This might also help explain why so few startups survive in Germany.
If a German startup has a nice idea and start working towards it with 4 ppl 30h/week each, at say 50k$/year/employee, a US startup:
- has access to most VC funds
- the German startup might have proven that there is money there, which helps getting VC funds
- has access to (0) a lot of (1) top and (2) absurdly hard-working talent that will put as much time as necessary for the startup to out-compete everybody else,
- has access to an ecosystems of startups around that might help them,
- has access to better way to compensate these employers, like almost tax-free equity, etc.
- has access to better ways to cash out, IPO, SPACs, etc.
Once these startups outcompete and survive the competition, then and only then they can and do switch to 35h/week, etc.
Some of my friends from MSc. in Germany work there at startup incubators. They have 50k$/year salaries for 40-50h/week, and B2B startups get funded for 2 years, die, and they just move to the next one.
Most of them are trying to switch to bigger German companies like car manufacturers to get a 35h/week job that's higher paid, and are pretty burned out of the life of attempting to build stuff that ends up in nothing because they get outcompeted by the US, China, etc. every single time.
This type of international competition didn't exist 100 years ago at this level, and many DAX companies are that old. AFAICT the youngest company in the DAX is delivery hero which is 10 years old. The most valued company is SAP which is 40 years old.
Compare that with the 30 most valued companies in the S&P500....
The question is "what values are we willing to abandon to stay competitive?" If America can compete by squeezing more out of their labour and operating in a deregulated environment, do we really want to walk down that path?
> "what values are we willing to abandon to stay competitive?"
That's a good question.
In the US, if you are founding a startup with 4 people, while all 4 are "employees", you are way closer to "self-employed" than to "9-4 employee at Siemens", and the startup more than handsomly compensates the employees with equity, to actually make it so: "you are working as an employee for a company that you own a big chunk of".
In Germany, it does not make financial sense to give a sizable chunk of the company to your employees. Many companies offer equity, or equity purchase plans, but as a "minor" perk, and not as the main part of the compensation.
OTOH, how long do you think self-employed people work in Germany? I know some that work 15 hours per day 7 days per week, and the system is perfectly fine with that.
So good question indeed.
My opinion is that Germany values with respect to "work" are incoherent and unsustainable.
Incoherent because Germany is fine with self-employed people working themselves to death for a miserable salary (most post man and DHL sub-sub-sub-sub contractors in Germany), the system itself keeps them miserable, while simultaneously preventing salaried employees to make the decision of how much do they want to work, and giving any freedom to their employers to appropriately compensate employees that perform better. The goal seems to be to squash the outperforming outliers, to try to broaden the average.
That's unsustainable, because cash cows (BMW, VW, Daimler, Siemens, Bosch, ....) come and go, but Germany can't generate them anymore. To the point that the German government essentially has to "co-conspire" with its cash cows (e.g. Diesel Scandal, etc.) to avoid any risks of them dying. The German people complain about the cash cows doing lots of lobbying, having lots of power, etc. but the reason this is the case is because, like the Germans call it, they are "of crucial relevance for the system".
Adding to that, is there any general reason for a German, besides money, to go to the US? So if the ones that go mostly do it for the money, they'll most likely stay gone.
I know people who came back after having worked a few years in the USA. Seems like a smart move to me, considering how large bay area home prices are compared to home prices in Germany. From my limited point of view, Germany is a way better and way less expensive place to raise your child than the USA. There is way more social peace. You don't have massive gun violence. Etc.
I know people who emigrated to the USA decades ago, and now send their children to German colleges because those are practically tuition free for EU citizens (you need to pay rent tho). If you want to move back more early on, you can use your savings from your time in the USA to get the bulk cost of buying a house in one of the regions with good tech jobs like Munich out of the way. Then you can live a great life in Germany even with the limited German tech salaries.
Note that I'm not saying that you shouldn't go to the the USA in the first place. In fact, I'm still strongly considering it myself. But the less healthy, young, single, and childless you are, the more advantages does Germany have for you.
There are plenty of smart people and high tech companies in Europe though, so there's no reason to take the job insecurity and parental leave hit for that alone.
You'd have to be in a niche where there's only a few teams world wide that are any good, and the US one is the one that's hiring.
> There are plenty of smart people and high tech companies in Europe though,
Its like comparing a top German tech university with MIT, Stanford, or Berkeley.
Sure the German tech universities are really good, but from the set of people I know with offers from MIT or Stanford, none of them rejected them, because they were a huge boon for their careers.
The impact is pretty much the same with tech in SV.
> so there's no reason to take the job insecurity and parental leave hit for that alone.
Parental leave is usually _orders of magnitude better_ in SV than Germany.
All SV employers I know offer you 4-6 months of fully-paid parental leave, and allow you to take more months, but unpaid. If your salary is 600k$, your paid parental leave is ~300k$.
In Germany you get max 1800 EUR netto / month of Elterngeld.
If you take it for 14 months, that's 25000 EUR. Somebody making 5000 EUR netto/month (e.g. 120k$ brutto), and deciding to stay at home, looses 3200 EUR netto per month. Most of the people I know making slightly over 100k$ in Germany with kids went back to work as soon as possible (women in less than 3 months... which is nuts), because they have bills to foot (mortage, etc.).
You're saying in SV, they're 600k$, but in Germany they're only 100k$, but it would be 2x expensive to hire them?
Why don't you pay 600k$ gross then, they get 300k$ net, and thus 3x what they'd get otherwise in Germany, but don't have to move to the US? Seems like a feasible strategy to me.
Paying somebody 300k/year doesn't make them "top talent".
The top talent is in the US, Taiwan, etc. designing the 3nm plants, operating the 5nm plants, doing research, etc.
Why would a 600k$/year engineer relocate from the US to Germany for a 300k$ salary pay cut ?
I've always made more money at my next job than the previous one.
If a company wants me to leave my life here behind and move 15000km, they better offer me more, like 700k$ or 800k$. In Germany, that would cost the company 1.6 million $ yearly.
Do you think they're not paying any tax in the US? That 600k gross is at most 500k net (probably less)
Also you assume they are a) happy to stay in the US b) have no immigration issues to deal with c) don't have a crazy CoL on SV that eats most of that 500k...
Yes, it's not a clear-cut move, but not too bad neither. Salary is not everything.
When you are making 600k$ a big part of your compensation is stocks.
There are lots of ways to pay fewer taxes in the US when holding stocks. Plus you have 401k, backdoor Roth, etc. retirement saving plans that are non-existent in Germany.
This is a bit of a doubled-edged sword for German companies actually.
For example, Bosch has a research campus in california to try to achieve this.
The problem is, that after being 2 years in the US "becoming top talent", you now have the option of staying there making $$$ or coming back to germany.
Even companies like Bosch that invest a lot of money in these types of systems, have huge problems making competitive offers for the people that consider going back.
If you would offer $600k for an engineering position, there would be no problem finding any numbers of engineers in Germany. They all would have to line up behind me of course :).
Yes, to quickly ramp up, you would have to pay more than teh average market salary, but as you pointed out, engineering positions are not as highly paid in Germany as in the silicon valley. There is nothing preventing you from paying good salaries though.
Europe has a great supply of electronic engineers and physicists. The only challenge would be that currently a lot of semiconductor investments happen in Europe, but these investments don't happen because Europe is such a bad place to invest in. Including a great supply of engineers.
> If you would offer $600k for an engineering position, there would be no problem finding any numbers of engineers in Germany.
I'm baffled at some of the answers.
Paying somebody 600k$ does not make that person a good engineer.
You could pick an undergrad, offer them 600k$, and they could take the job, but that won't make them top talent.
No company out there paying their engineers 600k$ is going to give an engineer 600k$ if they are not worth each $ of those 600k$.
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It's not about finding engineers that are willing to have a 600k$ salary (who wouldn't if someone offers it to you?), but about attracting the best of the best engineers of a particular field, many of which already do have that salary. Why should they move to Germany?
> You could pick an undergrad, offer them 600k$, and they could take the job, but that won't make them top talent.
But that's exactly what is happening. People are paid these insane salaries because they're either born American or got a green card. Do you think the 20 something hired at $200k+ in the Silicon Valley are worth 5 times the seniors devs at $40k in Thailand, Spain, Poland? The only difference between a 5 digits salary engineer and a 6 digits salary engineer is a green card.
> But that's exactly what is happening. People are paid these insane salaries because they're either born American or got a green card.
Not really. Lots of people from everywhere in the World apply to Google for US (and German) positions. Most of them don't get the job. Google has offices everywhere in the world. If they want to hire you, they just hire you in your local country, and after 1 year you can transfer to the US without a green card.
> Do you think the 20 something hired at $200k+ in the Silicon Valley are worth 5 times the seniors devs at $40k in Thailand, Spain, Poland?
A 20 something hired by Google in Germany also makes 200k$. (160k EUR). For Google, these 20 something programming-competition winners and phds are worth more than most senior devs doing management with no programming, or cruft apps, etc.
Not all of these 20 something will end up making 600k at google though. But in Google they have the chance to develop into that.
I think there are plenty of engineers in Europe and Germany to find. Europe has a healthy semiconductor industry, just not so many fabs. And why wouldn't a lot of people want to move to Germany? Considering how many of my colleagues have moved to Germany for the job, I don't see a special obstacle there.
Also: wherever they build their new fab, if it is outside of Taiwan, they probably have attract the engineers to move there, which place would be better suited at the moment?
As a German
Permits, the government is V slow. And labor is expensive. Also sounds expensive to use all the water they need, since they would need to clean it up very good and align the temperature with the rest of the attached rivers or what they use. And other climate relevant regulations.
Taiwan is a tiny area compared to the diversity you get in Germany, which has very diverse weather across regions, significant rivers, accessible groundwater, etc.
That's what Elon Musk said too about the Brandenburg Facory ("Doesn't look like a desert so it must be ok")
But environment groups are saying that ground water levels have been decreasing for years and the factory would demand too much from the water network.
I assume Tesla was just trying to be cheap. As soon as the water supplier said Teslas expected demand (372 m³ per hour) wouldn't be possible, the demand suddenly shrank to 243 m³ per hour. So my guess is that Tesla tried to reduce capex by employing more wasteful water usage but now has to work more efficiently. https://www.quarks.de/umwelt/wie-problematisch-ist-der-bau-v...
I think the demand was peak demand, so all you need to reduce that is a) accept it as a bottleneck and slow the most water intensive process to spread the peak out, or b) add a buffer pool.
Practically all went bancrupt between 10 and 12 years ago. Starting around 2000, Germany began to heavily subsidize private solar panel installations with guaranteed prices around 1Eur/kWh (later falling to 0.5Eur/kWh, now around 0.1Eur/kWh). With subsidies falling, demand dropped. And initial high subsidies (some claim, see [0]) made the industry too lazy to get competitive abroad, so around 2008 China began to ramp up production for cheaper panels at dumping prices. Politicians failed to react with import duties until it was too late (around 2013). Falling domestic demand, lower prices and higher production in China and political failure to protect domestic production all lead to the death of Germany's solar industry. Even big names such as Siemens solar branch, who could have easily weathered the storm and buy up their competition on the cheap, got out as fast as they could. Because political flailing signaled imminent doom and no betterment in the long term.
Of course nowadays there is again political hypocrisy mounting around the need for shorter transport routes, domestic independence, more capacity, etc. But even so, measures to prop up European solar manufacturers are very weak, import duties have been lifted and China's production has now become too strong to oppose. So there is a little useless promising before an election, then silence.
I knew the Government mess up the solar market but I never knew just how much incompetence was at play there. Loosing industry to China (I am still furious about KUKA) is apparently a recreational sport for the CDU.
You got it wrong. The policies that heavily subsidized the solar industry were written by Merkel when she was the Minister for the Environmental Affairs in the 90s, but put in place by Minister Trittin from the Green Party after the '98 elections. The death of the German Solar industry was the result of KEEPING those subsidies TOO HIGH FOR TOO LONG. If the government makes sure that the demand is increasing at a very high pace, all you will do as a manufacturer is t put all the cash you can get your hands on into scaling your production with the current state of technology. You'll stop all R&D, because the immediate ROI of selling "state of the art crap" is much higher. In the mean time, China created competitive technology with lower cost and finally, at some point in time, they've even created the better solar panels.
Thats sadly wrong, Chinas solar industry was heavily subsidized by the state to purposely crash the market prices of panels and ruin the solar industry of western countries. Once they succeeded they raised prices again to make profit.
So Chinese subsidies are “purposely crashing the market”, while German subsidies are... what exactly? Well, they did not crash the market, but they crush innovation and competitiveness, while China improved.
Have prices actually increased? Lazard's Levelized Cost of Energy analysis shows a steady decline in cost https://www.lazard.com/media/451447/grphx_lcoe-09-09.jpg but that also includes operating costs. I can't find a source for the solar panels themselves.
They just didn't decrase as fast as they could have, given falling prouction cost. But then again, the market was heavily distorted by German and Chinese subsidys anyways, so it is hard to know what the subsidy-free "real" market prices would have been.
Germany entered a subsidy bidding war with China and eventually decided it's not worth the extreme skewing of the market and pulled out. This had the consequences that solar panels are now manufactured in China. IDK but from my point of view, solar panels are more dependent on salaries than chip manufacturing is.
We spent a lot of money on solar, lots of German companies started to fill the demand, the Chinese came in and dumped prices, Germany decided not to import-tax -> lots of German tax payer money spent on installing solar power, but all the German solar companies were priced out of the market by Chinese companies.
Basically, Germany built Chinas solar industry, let our own die.
Also, they've made some seemingly stupid decisions such as closing nuclear power plants. And I'm not a fan of their climate change policy, they should push for a worldwide carbon tax instead of forcing EVs.
I don't know why you're under the impression technological backwardness has anything to do with abandoning cash. There's a lot of things to critizise the german government for - 16k broadband lines for newly built industrial parks anyone? - but not replacing cash is certainly not it.
its not. you have to have _TEST HOUSES_ nearby. and this would mean, like for most of germany semiconductor output, that these wafers are flown to china for testing & assembly.
There are already quite a few plants (Globalfoundries, Bosch, Infineon, TI, Osram, ...) so the qualified work force is there.
Germany is also pretty heavy on high tech production, so there's a big existing supplier network.
Key suppliers like ASML are nearby (Both the Netherlands and Germany are part of the Schengen Agreement, so logistics-wise almost as open as cross-state transports within the US).
Minor nitpick: Schengen does not matter, membership in the customs union does. For shipping, availability and quality of infrastructure is more important.
Schengen and in the customs union is still a little better than non-Schengen and in the customs union (eg Ireland), but yeah, the customs union is the main thing.
Countries that have semi factories in Europe: Germany, Italy, France, Ireland, Netherlands, UK, Austria, Belgium, and Hungary (with different capabilities and sizes)
So it would be natural that it ends on the countries with existing factories and expertise.
The German (or even we might say, "north-european") self-deprecation gets old sometimes...
German self-deprecation? I wish! My impression is that Germans feel to be top notch no matter what. I rarely heard self-deprecation from them, humble brag is what come closer.
Labor laws would still be sort of OK for a high-tech factory like TSMC.
But I think environmental policy would be really hostile to a large fab. Politics seems really fickle about it too. For "old school" industries like coal they try to bend over backwards to make exceptions, but when it comes to new players especially local politics will have little reservations to tanking your multi million dollar projects.
This can obviously be a huge benefit to the population, but if I were in the position to choose a location I'd factor that in heavily.
Problem with new players imho is the high level of corruption in certain parts of government and industry. While you cannot usually bribe a policeman in Germany, construction, permitting and industry subsidies and politics are heavily corrupt. Old-school industries are propped up by an old-boys-network and revolving doors between political parties, unions, administration and industry. Many politicians who did well by the coal industry for example got their comfortable retirement position in the boards of energy giants. Same for the car industry. Parts of those industries are even still owned by the state or federal government, e.g. Volkswagen is partially owned by the state of Lower Saxony and Germany.
That is also possibly the reason Tesla is in such trouble over their new factory. While they are a car manufacturer, and a modern, hip and green one at that, which politics openly hails as good, secretly they are damaging established interests by the traditional German car manufacturers and their allies in high positions. So the administration will nod and smile, but try to find ways to hinder them.
I think Tesla is just in such trouble because they were building their factory without having all permits. They were allowed to do that, but had to get all the permits in the end. As I understood it Tesla then build stuff that are not usually allowed, I suspect Tesla was trying to establish facts and thereby trying circumvent regulation.
I don't really see the german government here at fault. They were eager to get the factory up and running and were working with Tesla to get it built quickly. If Tesla wants to build first and get the permits later, it also has to retroactively improve things when they were not up to code. You can't just get permits because you've built something.
You get some local activism against individual factories, but generally Germany is huge in building specialized industry and they manage to push companies to clean things up. For me that's all a win.
You can find giant chemical and manufacturing plants all across Germany.
Thinking Germany is problematic is a very narrow worldview, in most countries you have huge political/corruption/business continuity risks, from unsteady electricity to broken roads to terror threats - Germany is a safe and stable bet.
Then why hasn't this been an issue for any of the existing fabs? Semiconductor manufacturing has been a large welcome prestige thing pretty much anywhere.
It sounds like a positive incentive to cleanup the processes involved. Where there is a will,there is a way, etc. I don’t think that offshoring dirty industry is anything but NIMBYism and ultimately we need to cleanup electronics fabrication
In general investment in the "old" EU countries is less profitable due to higher taxes, salaries, and other costs. That's why most of the European companies choose to build their new factories in Central Europe: Poland, Czech Republic, Slovakia, Romania, etc. TSMC should do the same.
The Dresden/Saxony area is said to have in semiconductor manufacturing "2,300 companies with roughly 60,000 employees active in the industry in Saxony and generating revenues of some €16.5 billion last year."
Apple invests heavily in a Chip design center in Munich.
Customers for the TSMC chips would be in the automotive industry.
Tesla builds a new EV factory in Brandenburg near Berlin... Volkswagen has several factories working on current and future EVs, ... for example the ID.3 is being manufactured in Dresden, too.
I wish :) There's no infrastructure or know-how in Poland regarding microelectronics. The only related field is ASIC design - a few offices of American companies like Synopsys (>100 employees), Silicon Creations (a few dozen employees), Cadence (a few dozen as well). Intel has a massive R&D site but they don't do hardware design here, maybe except FPGA.
In the more distant past, i.e. up to 1990, all the Eastern European countries, including Poland, had semiconductor plants and many people, both engineers and workers, with good know-how.
However, after 1990, the plants have been closed and most of the skilled people have gone to USA, Canada or Western Europe.
So for the present time you might be right, it could be difficult to find enough experienced workforce, unlike many years ago.
This is more relevant when you're building lower technology items (toasters, gasoline engines, etc)
Personal cost in semi factories is much less relevant (and you actually want the higher-cost employees because they know how to drive the multi-billion dollar machines)
Siemens was good 30 years ago. More recently, they seem a little bit too tied up with politics, hiring ex politicians, getting caught bribing (e.g. in Greece). It's not a pretty sight IMO and I wouldn't want to work there.
Plants don't pop up overnight to the obliviousness of the state. This proposal brings into consideration vast amounts of money, tax revenue, and employment opportunities that the government will care about. All with unique infrastructure requirements and long roadplans.
To flip the question around: what does the ability to produce executive cars have to do with Germany's ability to fix the problem Intel have been stuck on for the better part of a decade?
Imtech? It was their German branch. Regardless, at least they could rely on Siemens and Bosch to nail the fire system, PG BBI to do the planning, and GMP for the architecture.
Another German here, I agree. The regulatory hurdles are insane, the sentiment among the population is anti-business and I see the chance that the Green Party will be in the Next government as another negative point for businesses.
While I get the sentiment, regulatory issues would be only one factor to decide and in some cases not that big (medical for example is heavily regulated the world over).
The fact that you guys have a large pool of talent for advanced manufacturing (for this kind of thing probably the biggest consideration), and central location with easy access to all other parts of Europe were the likely elements to win out.
It's not like it's very different in the rest of western Europe, and eastern Europe probably doesn't have the know-how to do it. If you want to be in the EU, Germany is far from the worst place.
