Item — HN Reader

Good article, but the model is too simple. UK used to produce more cars than Germany, but it's the opposite now. Why? They haven't shared the same currency. German cars were better.

> And it means those same workers in Spain are less equipped to compete for Manufacturing jobs — because Elon Musk has to pay them in German Euros instead of cheap Spanish Peseta. If you’ve got to pay everyone in German Euros, you might as well get the most productive workers for your “buck”, right?

If that was the reason then he should move his factory 50+ miles East. Why the factory is near the Berlin? Network effects. They have the logistic, supply chain and talent. Even electric car project, created by Polish government is designed and build in Germany.

3 comments

That point also ignores the fact that spanish workers are indeed cheaper than german workers. You can't focus on the unit of measure (the currency) while ignoring the accompanying number...

You're right. Unsurprisingly, in some countries workers are paid more "German euros" than in others countries.

https://ec.europa.eu/eurostat/documents/4187653/8516126/Comp...

Also a lot of the industrial capacity in Germany is very obviously significantly older than the Euro. In fact the strength/weakness of the currency is not one-sided. A stronger currency (like the Deutsche Mark before the Euro) incentivized German firms to innovate rapidly to stay competitive even in the face of a more valuable currency, and that is something that can also be seen in the labour productivity statistics. German workers are about 30% more productive than their peers in the UK.

German exports are also not particularly cost-sensitive because so many hidden champions in Germany deliver specialised industrial goods that are hard to replace (as the saying goes Germany makes "the thing that goes into the thing that goes into the thing"), which reduces the impact of currencly fluctuations.

If by productive means lying about car emissions to cheat authorities, yeah, Wolkswagen and Audi and whatever are really efficient cars made by really productive german workers.

Maybe we could move this conversation to adult zone and non-cartoonist levels beyond "spanish cheap drunk workers living in the beach" and "german saint teetotalers workers"?

Thinking that a spanish engineer is less educated than a german engineer is hilarious (yeah, we take siestas under a cactus with a big hat all day in between last party and next party). University titles in all EU are equivalent for the same grades.

Productivity can be measured for example by GDP per hours worked, and Germany's productivy is very clearly above Spain's.

These are facts, which do not demean Spanish engineers, so no need to be defensive here. You are just taking one incident and using it to brush over economic facts.

Economic facts that don't mean what you think they mean.

Lack of productivity has nothing to do with individual performance, but with automation, industrial capital, organization and regulation.

Spain suffers from an antiquated labour regulation, including perverse incentives. As an example, many companies refrain from growing over certain size because it triggers a nightmare of regulation and expenses.

Also there are other barriers... I could write about that for hours, but it's sad and I'm tired.

That is why I wrote, those facts don’t mean, that people are better. Germany is just more productive.

Reading people repeating again and again the same stupid fairy tales about the lazy southern europeans and the diligent northern europeans is frankly annoying. For example the author says that:

> "I don’t think they have siestas in Germany…"

A wild siesta cliché suddenly appears.

You are really funny. For your information, workers in Spain don't have "siestas" since XIX siecle, we have electricity and cars also. I can understand how for many young europeans the entire experience of Spain can fit in a blurry weekend in Magaluf, a bleeding nose and maybe a broken arm after jumping to a pool, but the country is a little more than that.

> Productivity can be measured for example by GDP per hours worked, and Germany's productivy is very clearly above Spain's.

Productivity per hour measures capital investment and labor skill within the same quantity.