Why Europe Needs Higher Wages
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- เผยแพร่เมื่อ 3 พ.ค. 2024
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Mario Draghi is on a mission to fix the European economy - or at least his report might. In this video, we take a look at the economic challenges facing Europe, Draghi's proposed solutions, and his argument for higher wages.
Why Southern Europe is Finally Outperforming Northern Europe: • Why Southern Europe is...
What's Gone Wrong with Sweden's Economy?: • What's Gone Wrong with...
Why Separatists are on the Rise in Spain: • Why Separatists are on...
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1 - www.wsj.com/articles/inflatio...
2 - www.euronews.com/business/202...
3 - www.visualcapitalist.com/visu...
4 - ec.europa.eu/stories/soteu202...
5 - www.ft.com/content/f6200dc5-e...
6 - geopolitique.eu/en/2024/04/16...
00:00 - Introduction
01:08 - Why Europe's Economy is Struggling
05:19 - Higher Wages
06:40 - Better Intra-European Cooperation
07:22 - More Active State
08:06 - Sponsored Content
As an European I can't disagree
As an Eurpean I must disagree. To follow Italy means to get Italy' problems. Higher wages in Europe only helps China.
As a European, I can. Wages are fine. It's just that as soon as you receive your wage, 60-70% immediately goes to rent. You know what happens if wages go up? Landlord rubs hands together...
Wage - price spiral would just go crazy. Inflation would go crazy and we would still be at the exact same spot as we are now except bank accounts would look more impressive
@@martynasg9652 That is only if wages are raised with a bureaucrats pencil, and not organically, based on overall productivity. However, what Draghi wants is to have both his cake and eat it. The guy essentially wants for people to have higher wages, but at the same time for the states to expand their spending deficits even further. The problem is that without stimulating labor, without tax reduction and without incentives to create higher paid jobs, you can't have higher wages. And indebting future generations even further is not the solution.
@@undefined6341 that's probably true
Now imagine living in Portugal where the average salary is less then most minimum salaries in Europe, and the prices are basically the same if not higher in some things.
PORTUGAL CARALHO!!!!
Had to compare Portugal to Croatia, our cost of living index is almost the same, so I guess I don't have to imagine it.
How do you survive with that. I live in Spain, near Alentejo and with a much higher salary I still struggle. Can´t believe how it is in the other side of the border.
Now imagine living in Czechia (or anywhere in Eastern Europe) where the average salary is less then most minimum salaries in Europe, and the prices are basically the same if not higher in some things.
And then take Croatia where the medial wage is 1057€ but the prices are the same and sometimes higher (supermarkets are more expensive in Croatia than in Germany for example). I really don’t know how people make it through the month
Do you mean to say that making us poorer didn't magically fix the economy? Who would have thought!
Not spending more than you earn does fix a debt crisis. Who would've thought that debt is bad? The question isn't if but how. Who is to pay for this? And the powers that be don't want to pay their fair share
the finance minister in my country does 😅😖
Making you poorer? By having a balanced budget? You have no clue about economics, right?
That was not to fix the economy it was to help with Climate Change. Now you can't afford to go on vacation, have several cars, and your carbon lowered as a result. If the EU makes you even poorer you will help the Climate agenda even more as you probably will only travel on public transportation. Just take comfort in the fact that your sacrifice is to help the planet.
@@filipmihalovic2822 Yeah, austerity caused GDP to stagnate, which makes it harder to reduce debt.
Investing to increase GDP makes sense to reduce debt.
High wages means higher consumption which will grow tertiary industries eg Services. Higher wages allows for higher spending full stop. Europe and the UK needs this desperately imo
True, but higher wages also means higher production cost and higher service cost, most companies make costomers pay for those cost. Its a difficult problem.
@@mennowolters3359 No. Workers will just become more productive with more investments and better tech
I agree with you as a scientist 30k-35k GBP as BMS in UK while in USA its like 84k USD averagely and usually 30k bonuses that's a quick google search on medical industry. UK wants to be a superpower in science, pay more and recruit more. Otherwise, as George Freeman said, our science ministry that the UK is not a scientific superpower and won't become one.
'There are no solutions. There are only trade-offs.' - Thomas Sowell
Well, try to explain that to "experts" like Christian neoliberalism Lindner
In Italy, we have the same wages of 30 years ago. I'm not kindding! Meanwhile the cost of living has doubled.
I'm not an economist, I just know this sucks 😅
I've heard this many times by Italians but it's misleading. In truth, wages in Italy have stagnated on real terms, which means that they have only increased on nominal terms, but the purchasing power remained the same. If wages were the same as 30 years ago and "the cost of living has doubled" as you say, purchasing power would have been cut in half, which is not the case.
@@grace-sw4zxWell, cost of living is higher, I can see it with my eyes. Maybe it's not as "bad" as we believe it, it can definitely be better tho
You are surely no economist!
What we need is tax and fee cuts!
The state is the problem not the private sector!
Low incomes should not be taxed at all, consume taxes should be cut by at least 50%.
The rich should pay their fair share but most importantly the states must use our money wisely plus when they dont have enough, they can borrow it, as it used to be!
I desperately want Europeans to have more money!
But let us do in the right!
@@tobiasphilippwittlinger8753 oh the genius has arrived! I've never claimed to have a solution dude
My feeling is that in Italy, for example, labor is taxed too highly, while property relatively too low. We should shift taxation out of worker incomes to rise employment and spending power.
esatto ma figurati se i nostri politici hanno le palle di fare grossi cambiamenti
Honestly whole world should abandon income tax and start a dividend tax
Screw the capitalism
Same in the UK. Property is the thing that is really killing European disposable incomes. So much investment goes into property speculation, which forces up prices and rents, whilst rental income and gains on property sales are much lower than earned income.
Most countries have dividend tax@@Bleilock1
@@footballuniverse6522 darei la "colpa" al popolo in questo caso ;)
I can't speak for the whole Union, but in France, it's an insane amount of regulation that keeps innovation and wages down. You can't open a business without going through a fistfight with the local government, you can't hire someone without the same thing. If wages are to rise, you have to let people be economically productive
What regulation keeps wages and innovation down ?
@@haboubia 50% to 60% of your income going to the State is not healthy in any society. In top of that there are too many regulations to open a bussiness.
@@joaquinescotoaleman4320The fastest economic growth in American history occurred when taxes were that high. I don't think the connection is as significant as many think. In fact low taxes on the wealthy can quickly result in economies slowing due to under investment by the Government.
Same here in Germany, you get the feeling that government is working against you. Instead of helping, motivating and guiding ordinary ppl to increase their personal wealth it seems legislators create ways to make it more difficult. Every year the words"You will own nothing and be happy"echo more loudly.
@@joaquinescotoaleman4320 50 to 60% isn't going to the state unless you're making millions
Once you have worked for American and Asian firms, a European firm feels like an old age home. They are slow to expand, slow to digitalize, and slow to incorporate new tech. Have all the higher wages you want, but I am not sure where all that money will come from.
Stupid socialist ideologues screaming dumb shit without understanding basic economics.
They're lefties. They want a bigger government to wave a magic wand and 'make things better'.
A big reason for that is brain drain. The youth would stay if the wages were more competitive, making firms younger as a consequence
I fully agree with you and I think the main problem for this is the lack of a robust european capital market. There is no to limit funding available for start-ups or smaller companies to expand. This means that in most states we are at a point where there is no competition anymore. It is just the same old oligopoly, if there was actually some competition european companies would be forced to addapt. Just look at VW as an example, started way to late into the EV race and while it is catching up it was extremely expensive to do so.
@@Bsilux but when it starts rolling it will overtake Tesla in the long run lmao they are risk averse, yes but the upside is, they are more grounded and stable; they'll outlive and buy of theses young upstarts. Witch is part of the problem, even in UA or Asia imo; Almost no one can rise from the ground up to top tier anymore, they'll get eaten before that.
Even the EPP realised that wages need to be raised
Europe can only Raise Wages with an lower Rate than our competitors, if we raise more ? We just get higher Unemployment. Countries with Lack of Workers (Fx Denmark) can Raise more to attract workers from other EU countrys, But Countries with high unemployment can only Raise littel.
@@mabuhayproductionltd3627even if it’s only certain EU countries that increase wages, it will increase demand within all of Europe. Now it will be individual countries with a big export strategy within the EU so they won’t have to worry about protectionism.
@@rabidlorax1650 Leads to higher imports from outside the EU wich is just silly. Europe will just bleed money.
The blight called Temu and the likes of the sort. China is a dytopian so iety that should colapse sooner than laer. Import tarif from Chinese products are in order. Sweat shop. Bad work conditions. Slavery. Polution, aggresive geopolitics. F China.
Banning tiktok is a good start. HIGHER mport tarifs for China should follow.
wages in america didnt increase because of government regulation, and that also wont fix the situation in europe.
@@milantoth6246 you're right, wages in America simply didn't increase. Except for executives and IT, which is stagnating
They've been too low for a long time
Basically my whole carreer there has been very little if any pay raises.
True
Hate to burst that bubble but it will only get worse. Scarcity of goods will only rise as conflict increases and demographies collapse. Higher wages won't manifest into anything tangible.
@@K1989L same
@@LaFonteCheVi unless ClA releases the free energy tech
nice to see someone with influence finally realise the death spiral austerity has put us on. The common person needs to be at the centre of our economies not corporations
So why dont we free the common person from the tax madness?
@@tobiasphilippwittlinger8753The common person, as in the poorest 51%? I agree, the poorest 51% should not pay income taxes, this will help them have more disposable income and move up the economic ladder.
The richest 49% do not constitute "the common person" and should thus continue to pay an income tax.
@@iwiffitthitotonacc4673 I agree as well!
@@tobiasphilippwittlinger8753Ask the corpos
Demand creates the economy. Supply side economics is a cancer.
Most important part of the video is about the difference between EU and USA borrowing cost. No other country can borrow as much as the US without being punished by global capital markets.
The ease of doing business cannot be compared either. The process just to incorporate in most major EU countries is absolutely Byzantine and full of pointless extra steps benefiting entrenched bureaucracy. It is full of delays and reviews and costs thousands of euros. Meanwhile you can file in the US from your phone in 5 minutes for a few hundred dollars at most. And this is the easy part and not even considering any operations or doing anything crossing national borders. Everything at every step of the way is easier and more efficiently done in the US. Particularly in the early stages, you can run a business for years and not face any kind of bureaucratic stress until you are actually making real money, or possibly never if you are just operating a small business with a few employees.
true, but Europe/Euro denominated debt is a close second to the US.
The US also has a much larger GDP and total wealth than any other country as well, so they have more money to work with. Both China and the US invest a lot into themselves by borrowing money
Especially China, their total debt to GDP ratio is already at above 300%. And they’re not even a developed country yet. That’s even Higher than the USA’s 250% total debt to GDP ratio. Japan’s is over 300% as well
Europe needs to invest more money into their economy and corporations. Companies from the US and China get huge subsidies to help them. That’s why almost all of the biggest companies in the world are from those two countries
US borrowing ease won't be true indefinitely.
@@tylerclayton6081 Exactly, it's massive debt and stimulation of the economy through deficit spending. The USA is happy to run deficits equivalent to 6% of its GDP (I'm not saying it's the right approach or that I enjoy it but that generates impressive macroeconomic figures). The EU on the other hand requires its member states to keep deficits beneath 3% of GDP and even threatens to punish those running above that threshold.
So we're talking about a two-fold difference in the allowed deficit, off trillion-dollar/euro figures. These are not small differences.
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A small sidenote: when Draghi talks about higher wages he isn't referring to a directly higher nominal salary, but rather a higher real wage taking into account discount rates, market competitiveness and overall purchasing power. Only directly raising salaries will do nothing but inflate the market.
If rising nominal wages would strictly lead to inflation and not help, then why has not raising wages not stopped inflation, and why do lowering wages not lower inflation? It seems that inflation happens anyways, and the rise in inflation from rising wages is way overstated
@@OncleSpenny because rising wages are not the only thing that contributes to inflation. Money printing, energy shortages, increased demand with no increase supply,... there are dozens of things that contribute to inflation, and rising wages is one of them. That doesn't mean is overstated. Rising nominal wages on a vacuum does literally nothing to increase actual purchasing power, this just leads to consumers artificially having more money at the expense of businesses, which means businesses will respond to it by automatically rising prices and/or firing workers. The only thing rising wages does is contribute to inflation, unemployment and in most cases, less competitiveness, especially for small businesses.
Finally somebody that understands the situation.
Thank you, I really needed to read that!
@@_MrMoney well thank God we don't live in a vacuum do we Mr homo economicus
Supply needs to be increased on basic goods to fight inflation there, however, strong purchasing power is necessary to nurture tertiary industries.
The key is to increase wages, but balance it with incentives to improve efficiency in basic goods, such as subsidising upgrades that would increase overall efficiency and lower costs through innovation.
Only with internationally competitive purchasing power can standards of living rise, and industries grow.
As an Swed i respect you have a Göteborg T shirt
I see that Göteborg 1995 refers to the athletics world championship in 1995. What's the significance??
@@UchihaAditya got me wondering too
European agricultural protectionism through enormous subsidies is second to none
Probably why the topic was clearly about Industries, not agriculture...
Agriculture is a tiny sector now. Industry, energy, and services are the concern here.
@@Ruzzky_Bly4t This is why it is so idiotic that there are large subsidies going there
It certainly is tiny but CAP accounts for about a third of EU budget, that is mostly direct cash to farmers
Europe's agricultural policy is not really protectionism, but rather a question of sovereignty.
We cannot be dependant on third-countries for such a strategic and essential element that food is.
Keeping our agriculture competitive allows us to keep food imports to the minimum.
Not really sure why you are saying Draghi was a big architect of austerity, that was much more his predcessor at the ECB: Jean-Claude Trichett. Draghi was the "we will do whatever it takes" guy, I don't think you can blame him for the austerity fiscal policies which were pushed on the country levels.
He was more the 0 interest rates guy which saved the ass of Southern Europe
@@Boretheory Yeah he wasn't the austerity guy. The austerity guys also wanted higher interest rates, not sure why the guy making this video is claiming Draghi was on the side of austerity.
They don't say he was "a big architect". They just say mention the austerity "he oversaw".
I’m a software engineer living and working in Italy, my wage is about 1/4 of what i would earn in the U.S. I am aware that my country is not the most competitive in the EU as far as wages but still, that makes you wanna re-consider your options
Come to Switzerland!
Forget Australia as an option. I'm in Australia and I had a look at my pay over the last 10 years. Inflation average 2.6% p.a. vs wage increase 1.3% p.a.
@@tobiasphilippwittlinger8753 i actually might!
How easy is it to get a house in Rome with your wage compared to getting one in Boston with 4x wage?
@@DarkZodiacZZ it’s probably a little bit harder to find one in Boston, or at least that’s what some friends there told me, but as far as yearly salary to house price is concerned, the math works out to be about 10x in Rome and 5x in Boston, (looking at apartments specifically)
Nurses and doctors in the UK haven't had a payrise since 2008 and we've effectively had about 35% of our salaries taken away from us. So yes, I have significantly less money to buy things I don't need and stimulate the economy a lot less.
We also dont have children aged 32 because we cant afford them and the governments are confused why we have declining birth rates
so what was the wage in 2008 and what is it now?
You're talking BS
@@chrimbus71 What were wages after inflation is included? You're way too confident for someone who knows so little.
@chrimbus71 we have had 16 years of consecutive paycuts when inflation is factored in. Housing inflation is never included in official inflation figures. If housing costs were taken in it would probably mean we are working for about 25% of our 2008 salary depending on where you live.
Don't comment on things if your smooth brain can't comprehend the information
No it's your fault. You guys elected tories years after years. (Now you can tell me about how you didn't vote Tory but majority of others in your country did vote right)
@bloodwargaming3662 I couldn't hate the Tories more if I tried lol. The problem we have is labour betrayed the working and middle classes with immigration so I won't vote for them either. Politically homeless
One thing you missed about the US's ability to remain isolated is that it already is. US foreign trade as a percentage of GDP is lower than almost every country on Earth. Europe, quite the opposite, has countries with trade-to-GDP ratios over 100%.
The USA has most of the resources it needs internally, including oil, gas, timber/lumber, corn, wheat, soy, and much more. Europe, on the other hand, needs to import almost all of it. Britain is the only european country outside of Russia that has oil/gas, but it's not enough to enrich all of the EU let alone matching them economically with the USA.
Resources make up almost nothing of the US's economy (same with Europe). This is actually about demand being internal. European companies ship products abroad whereas American ones sell internally.
I live in the Netherlands. And whilst I am glad with all the social safety nets we have, the generally cheap(er) education, clean drinking water, good roads, etc., I can't say that I wasn't pissed with how our country has handled wages and labour. In the past 23 years (Balkenende and Rutte), we have cheaped out on education, have semi-privatized healthcare, to this day attempt to privatize public transport, have become a mascot of the housing crisis thanks to all the private sector rental, and have become one of the biggest tax havens on the planet for the top of the societal food chain. We tax the middle class out the whazoo up to 49.5% above 69k, whilst giving subsidies to oil companies and quietly trying to hush scandals. Our wages have barely risen at all, meanwhile housing prices have gone up and up and up thanks in large part to the buying and renting out of available housing. I don't care what anyone says, I want a global slam down on these mega corporations and their greedy taking and taking and taking. In an ideal world we wouldn't need overreaching regulation to stop the greedy from just taking everything, but we have seen that that doesn't work.
As an Italian, they offered me a job in the Netherlands about a year ago and I declined because even if Italy is suffering from a lot of these problems, I have my family here and I have more economical stability (or at least I had). Do you think I made the right call or do you think I should have moved?
@@ervinm.5065housing costs is a major factor. If you have no immediate housing you will have a very difficult time. Especially in the bigger cities renting is very expensive. The wages might be slightly higher than Italy but that won't do you any good if you have to spend it all on housing. I left the Netherlands just because of this reason. And the weather 😅 really not a fan of all the rain and overcast skies.
@@RobSpartanR16 the company was in Eindhoven and there was scouting agency helping me to rent a flat
@@ervinm.5065 Dutch here: if your NET was under 5500 euro, then you made the right call. You need about 5000-6000 euro per month NET, for a decent life in the Netherlands if you have a family. You can get away with 4000 net if you are single. Anything under 4000 net is slave/starvation/poverty wage.
@undefined6341 to add to this, that's the "shitty zone". At 1200 - 2000 a month you usually get all sorts of rebates and financial aids and social housing opportunities. With 4000 being fine if you're single since you can afford the additional costs. But like 2500 - 3500 is crap cause you earn too much for financial aid, and too little to really be able to afford the additional cost
Draghi wasn't really an architect of austerity. He is actually the men who started very exoansive monetary policy, stimulating the economy.
main reason for brain drain imo, especially in the tech industry. apart from london, zurich and maybe amsterdam tech salaries are very low in europe
All salaries are very low... That the point.
All salaries are low in Europe, especially when compared to the US. A plumber in the US earns much more money than an engineer in Europe.
@@adriandelatorreebro9555 I'll take a low European salary with a proper safety net and welfare state over a US high salary, low- taxes & no safety net, sink or swim attitude any day.
@@fhujf I wouldn't. A high salary is pretty much always preferable since I get to actually decide what to do with that money. Also makes it much easier to start businesses.
@@fhujfThere is Safety net but nit as good as most european countries
Dragi: "Europe needs higher wages to drive it's growth"
Me, a non-EU-european watching this video during a break on my full-time IT job for which I only get 850$/month: "yeah, right"
As a fellow full-time IT'er and out of sheer curiosity, which country do you work in? What kind of IT work do you do?
Bro get a job for an American company make american wages and live in your lower wage country and live like a king.
And minimal wage in your country is how much?
What can you buy for that money?
You do understanr that if you are making over 800$ a month but spending like 400$ to sustain yourself then in fact you are making more than person getting 1000$ but spending 800$
@@ZacharyPackard0976 You believe that an American Company pays American wages abroad? Lol. Naive much.
Meanwhile the minimum wage in some EU countries is 600USD per months.
So your comparison doesn't always work. You may be 100/150USD behind some people in your industry for some EU countries.
I knew austerity was a mistake back during the EU debt crisis. And I'm not an economist. It's hard to see people in power who are supposed to understand these things make these mistakes with such great cost to massive amounts of people.
You should never just blanketly reduce spending. You should make sure you spend on the right things. The problem isn't spending, it's spending on the wrong things. So pivot instead of slowing down.
You need to spend more and invest more in factors of production so that production is cheaper in the future. Creates more abundance in future.
Austerity is the nation level equivalent of putting money under your mattress.
The problem though, that should be asked Is how those wages are going up. It's not the average worker's wage going up. But the 1% who are getting more money.
The problem is way deeper. Europe just doesn't generate the value, that justifies these wage increases. Most regions have no great software industry (except north and eastern europe) and no growth potential there. Almost all milestones when it comes to new tech, come from the us..
exactly. europe should focus more on innovation and progress, less on limiting everything
China generate value but still their worker are svererely underpaid ,no corelation
@@dariusalexandru9536 so the Chinese deserve higher wagers more than Europeans. And who's to say the Chinese dont get it? The richest cities of China are the size of European tiny countries, and their GDP is on par if not more than European small countries.
Software is a flashy economy for market capitalization, but market capitalization is not the economy.
ig europe generate no value, europe doesn't produce some of the most sophisticated lenses on the world, vital for producing CPUs, europe doesn't produce cars, doesn't export culture, doesn't make research papers, all that matters is shitting out tiktoks, instagrams and other low value detrimental crap that exploits people thru data mining and psychological manipulation so that u can increase "engagement" and sell eyes to advertisers, that indeed id the utopia we all wanted.
Especially Germany saw decades of wage suppression to keep the coveted title of exporting world champion
the fact that Govt.. official statistics say around 21% of ppl are afflicted by poverty is good proof. I suspect another 20% are probably on the verge of poverty. The German constitution stipulates " Human dignity is inviolable. Respecting and protecting it shall be the obligation of all state authorities. Funny how the German authorities convieniently forget about the indignity of poverty and the exploitation of the workforce by big business.
Germany is an insane tax and fees apparatus!
That is the root of the problem.
Sounds like Germany and China had exactly the same strategy, but at opposite ends of the cost/quality tradeoff. Now that China is threatening Germany's auto industry, they're caught between free trade ideology and economic reality.
@@tobiasphilippwittlinger8753 Germany has a corruption problem. It's heaven for tax evasion and old money.
I am very impress they NEVER talk about reduce taxes from our wages.... we pay 45% in taxes, and to be franc the public services is not even good.
Let me guess... belgian?
you should try public services elsewhere with a less than 20% tax rates as a median or lower income individual for your arguments to be slightly worth more than random rants do ;)
In retrospect, what propels the american economy is almost its energy independence. Europe never have the abundance of fossil fuels 3:23 such as the us. On top of that, the US uses the world reserve currency which incentivizes 4:34 the investors to pile capital into america's thriving economy.
@hungo7720 that’s a simple way to state advantages the US has but it doesn’t propel the economy. Most Americans are employed by small businesses and it’s a consumer based economy. Low taxes, willingness to take risks of failure and innovation all contribute to growth and then Consumerism propels that growth. China does not have a reserve currency and is a net importer of energy but it has the second largest economy. Their economy is propelled by exporting. Plus, the US was a major economic power at the end of the 19th without having a reserve currency.
We could totally work on renewables and organic gas If we wanted. Not just by energy production but also but lowering energy cosumption because we have the infrastructures to do it. It's just that people hate to be inconvinienced and lowering our comsumption requires giving up to a lot of commodities
Small correction to "Europe never have the abundance of fossil fuels" - Europe used to have plenty of coal, which drove industrialization in the 18th and 19th centuries. Currently, Germany, Poland, and Ukraine combined hold 9% of the world's coal reserves.
on top of that, we made an enemy out of our biggest and cheapest supplier of energy, so... that's not helping much.
Actually the main thing that propels the US economy and the second largest reason (by far the largest is exchange rate) for divergence between the US and EU GDP's since 2000 is population growth - which is much higher in the US than in EU. There's very strong correlation between GDP growth and population growth in the last couple of decades.
We dont need very high salaries. We need German salaries...they are high enough. We don't need more than that. What we need is cheaper housing...
In Germany even in cities with 100k people price of new construction is 10k per sqm. That is crazy.
Brand new 2 bedroom apartment in centre of Toulouse(and every other city except Paris,Lyon and Nice) can easily be found for 300k euros. That same apartment would be 600k in Germany even in cities like Ulm, Aachen,Bonn...and of course in other bigger cities it would cost even more.
I looked at moving to Europe from the U.S. and it was shocking how much of a pay cut I would have had to take. For people with good jobs in the U.S. (and the associated good insurance/benefits) the standard of living is much higher in the U.S. than Europe - you guys really do need to raise wages to remain competitive.
Pay in the US for graduate jobs is higher, though I´d still say we live better in Europe, on average. European countries tend to have better schools (not always, but on average they are better), you can´t get fired for stupid arbitrary reasons in the same way you can in the US (in the Western EU at least, at-will employment doesn´t exist) and university tuition is either miles cheaper or free.
There are other things that really suck about the US, I hate modern US urban planning for example and it´s a shame as the US was a world leader in this in the 1900s. Urban public transport (depending on city) is often terrible, you have vast neighbourhoods with barely any shops and there is an addiction to driving (in the EU we´re far from perfect but the US takes it to absurd levels).
Universal healthcare and free education. Half of Europe got higher MEDIAN wealth per adult citizen than USA. 60% of USA citizens don't have even 1000 dollars in the bank. Even the poorest Europeans got thousands and thousands of euros in the bank.
education system is better in USA
@@Hasanaljadid Especially geography. 😆👍
@@Hasanaljadid The USA isn´t necessarily terrible at everything re education, some states are much better than others. On the whole though schools are probably better in the Western EU.
We've all needed higher wages since the 70s
Speak for yourself. Here we needed higher wager since 1945.
I agree, in US I could get 100k for my job and my company still make profit from my labour
And how much do you pay for medical bills?
Holidays? Sick days? Maternity leave? Free social services?
@@wardy6224 You're not profiting from that if you have a high-paying job.
@@Bleilock1 The job's probably going to cover insurance.
@@DaDARKPass yea but in the us medical bills arnt part of your bruto, like in europe
In the us you pay out od your pocket for it, in europe you dont
In the end the us and the western europe even out
The essential problem is wealth inequality and it´s that which is screwing people over rather than immigration etc. The people in charge want you to think that it´s immigrants taking your jobs and lowering your wages, rather than them wanting to take an even bigger slice of what you produce with your labour.
What if its a combination of immigration and wealth inequality? Because if its just wealth inquality then it can be addressed but if its combined with endless amounts of immigration then it will be almost impossible to fight it without enforcing a full stop immigration policy.
@@mikel9138 "What if its a combination of immigration and wealth inequality? Because if its just wealth inquality then it can be addressed but if its combined with endless amounts of immigration then it will be almost impossible to fight it without enforcing a full stop immigration policy"
What if indeed. Well, the internal logic of your argument is bad, r.e immigration, even if we grant the premise it isn´t a case of "either it has to be completely stopped or allowed to continue".
As it happens, the empirical research that has been done on this topic, by the Oxford migration lab amongst others has shown that immigration doesn´t affect wages that much. There´s some evidence of a tiny negative pressure on the lowest paid jobs, but it´s very small (0.1%) and remember those people too are benefitting from lower prices and more nurses and doctos etc.
What we know for a fact is that in many countries wages have been stagnant for a long time, since the 70s at least. We also know that cutting taxes for the rich, privatisation etc has contributed to worse outcomes for anyone not in the top 10%.
Cool conspiracy theory bro.
@@JSK010 It´s not a conspiracy theory, it´s an actual demonstrable fact, shown by statistics over the last 50 years.
@@Letsthinkaboutit-mb7nn none of what you say “the people in charge blablabla” can be proven or disproven by statistics. Just stale marxism
as an Italian I can't talk much about European wages.
but we definitely need a change, house cost too much, life costs too much, costs keep increasing and salary stagnates,
your career could very well be stuck in place (teachers for example, 0 years vs 40 years of experience is about ~200€ of difference)
we are starting to necessitate to group up so that the wage of 3 to 4 people can cover all expenses since alone its basically suicide.
to explain on better terms: (living alone)
Average necessary wage is 1500€ a month minimum for mediocre-bad life quality.
ideally you want 2500€ to live somewhat comfortably --> 3500-4000€ is where you can stop worrying about money (if you don't spend like crazy)
you still can't afford villas or sports car, you are middle class now not rich.
average salary is 1000€ or under, 1200€ is "good pay".
you see the problem?
A top skilled single German for example earns 6000 bruto € the money he gets after taxes is arround 4000€ 💀 Thats the biggest reason why the top skilled ones leave Germany and go to US.
2000€ cut 💀
@@ardi08 Thats like 33% tax
there are two ways to raise the bottom line. higher wages going in is the better option. if we lowered taxes we'd soon have crumbling infrastructure and homeless people on the streets like the us. no thanks.
With 4000 euros you're considered rich in italy. Germany is considered on the top 💀
With 4k a month you have more than 4 times average croatian wage
I agree tbh, highly skilled work here is paid incredibly low for what it is
The lack of knowledge about economical dynamics is mind blowing!
In a nutshell for you guys; the state is the problem, not the private sector!
Countries with Eastern European wages and Western European prices need a change. The differences within the EU are bonkers.
As a Portuguese i can agree, we are misable, only central Europe has decent wages and Switzerland and Luxembourg have good wages
Most of those good wages go into housing in those countries anyway so all in all they end up being not as juicy as they may seem from a Portugal POV. Still good! But not as juicy…
Have you seen the prices in Switzerland? Those higher wages mean the people who make your stuff also get a lot of money. And you're the one who bears the costs.
As a Spaniard I agree with you
I am Swiss, any idea why this is the case?
Because we know that socialism is a problem.
Higher wages mean higher prices, what you need, what almost all of Europe need, are tax cuts and a halt to forced fees for socialistic stuff!
@@tobiasphilippwittlinger8753 That's such a gross oversimplification of an economic system it's actually laughable lol to attract educated workers from abroad you need to guarantee a satisfactory life, which includes good social (not socialist) conditions as well 😂 Switzerland is not the capitalist haven you make it out to be
In Spain we increased the minimum wages a real lot during the last decade, and now we are the fastest growing european country. Market doesn't work if people doesn't have money. I thought this was already something stablished. But, of course, we have the Empresaurus class who just want to hoard and makes us believe that salary and condition cuts is good for the economy.
Como que España es la economía que más rápido crece?? 😂😂 esos países están en el este. España tiene un crecimiento lento. No hay que olvidar que fue el país que se recuperó lo más tarde del covid.
Es muy complicado realmente, tener salarios más altos significa más consumo y mayor demanda de servicios, por lo tanto resulta en una mayor ganancia para las empresas que revierte de nuevo al empleado. Pero al mismo tiempo, si los salarios son más altos, se contrata menos porque la oferta se reduce. O bien, el coste adicional se traduce en un coste de vida más elevado.
"fastest growing"?? bro's living under a paeya.
i wish it was commonly known here in the UK. We've had 14 years of austerity now and everything is falling apart and the government is going broke. The only solution to this put forward by either main party is more austerity, and the media all act like there's no other option so never questions them on it. Recently when inflation was really bad and wages for normal people were falling faster than they had in 100 years the head of the central bank told us we need to get used to getting poorer, while the sales of luxury watches and top end sports cars were still booming because the rich are getting richer faster than they know what to do with
😂😂😂😂😂
Well then, pay me more 😂, i wont get angry
They'll also pay the people who make your products more. And companies will put that extra cost on the customer.
It does not work like that!
The raise must come by cutting taxes and fees!
The state is the problem, not the private sector!
Me, a Czech: "Well that'd be lovely, wouldn't it?"
Europeans have for decades given up wage competition in return for a more egalitarian nanny state. Low wages, high taxes, and heavy handed bureaucracy stifles innovation, competition, and risk taking. In the end it creates an egalitarian state where everyone is equal, but to the downside. In the meanwhile you have the US which has a more open job market allowing people to freely seek better wages and a business climate that allows for and fosters taking chances. In the EU it is hard to take chances, and if you do the payoff is not really worth it since the government will take the money you earned and redistribute it. In the US you won't get regulated and taxed into oblivion and your business will be allowed to grow and create more jobs and earn more money to make more and higher paying jobs. In economics, a rising tide really does lift all boats; or they all get waterlogged and sink if chained together and not allowed to move freely in response to changes.
Consumer spending is the driver of the economy in the US, accounting for well over 2/3 of GDP. Low taxes allows consumers more money to spend and that spending circulates money thru the economy creating ever more jobs to create ever more spending. That constant job creation is also what causes wages to rise as more jobs creates low unemployment. Low unemployment is also translated as worker scarcity. What happens if there is a scarcity for something? You have to pay more for it, and this is just as true of wages as it is widgets.
When showing a Eurozone map, you still don't show Croatia as being in the Eurozone... Cmon guys, it's been 2years now, you can update the map.
This is soooo true. If you want to have highly skilled and creative knowledge worker, you have to pay them fairly. Otherwise, they move to the USA, and they have done that in the past.
He is advocating for a United States of Europe. It was easy for us because our states did not have much history. Each EU member has centuries of history, that each are extremely proud of. I don't see France or Germany giving that type of power to a "federal government." There is too much pride amongst the members for that. Lastly, it is obvious that Europeans need to be paid more. Without more pay, how can one expect them to consume more or be resilient to economic shocks. It is the same with Japan, which caused their stagnation. They're raising wages and now their economic engine is roaring back to life.
So when modern economists said we should "spend our way out of this recession," in 2008 they were CORRECT! It's almost as though Keynesian economics have been proven right yet again for the umpteenth time, yep!
European leaders should have listened to the people when they tried to tell them this all these years. Note sure they can do something about it now. Nice try to boost an electoral campaign though.
No wonder they are not releasing the report until after elections...
Austarity worked.
Is not about wages, is about TAXES. When an entrepreneur in Spain gets half of the results from his/her work taken by the state in order to maintain a machine that doesn't work is quite enraging.
European states, as Milei stated in italian TV, are way too big... which makes european economy quite slow.
Smaller and leaner state is key. But politicians don't want you to talk about it.
When you have an extreme imbalance of purchasing power of the uber wealthy and everyone else. You absolutely dont want to lower taxes.... that's throwing oil on a fire. You need to raise baseline wages with increases in minimum wage and raise progressive tax rates to offset inflation. More of the poorer people have more to spend with no changes in tax and the uber wealthy have less to spend on hyper inflating the assets and the stock market, which is whole other issue. And the idea that by paying less tax in Spain will not make the state work less well is moronic.
@@_F8. As a venezuelan still living in Venezuela I can say by experience: The so-caled "wealth redistribution" is a myth.
Big states are NOT the solution, they are the problem.
Socialism doesn't work.
Th so-called uber-rich have people that understand tax codes so well, they end up payng less taxes than the average small entrepreneur.
Besides. You rise wages, you add to the cost of any product, the cost infltes the prices and you're back on square one.
If you try to regulate prices, you'll generate shortages and black markets (look how things were in Venezuela between 2013 and 2017).
The laws of the economy are like the laws of physics: Inevitable.
As an American with no healthcare, the (American, at least) politicians that want to shrink the government do not want to do it in our favor. I personally agree with the spirit of the concept but it has to be done very carefully.
Privatization in the '80s today means we have powerful monopolies on basic services and the working class has no ability to "vote with their dollar" to keep the costs or service quality in check. Just look to our $1000 ambulance costs, the energy company PG&E that is so irresponsible that it caused the largest fires in California history (and now makes their customers pay for it in price hikes and multi-day-long blackouts), and our nationally dreadful internet coverage and prices that are just finally starting to improve somewhat.
There's a massive divide in service availability and quality between urban and rural areas. Even if you're in a city and supposedly have access to gigabit internet, it doesn't mean you're actually going to get reliable gigabit internet. Americans have high wages but waste it all paying for overpriced garbage.
The US is finally trying to ban noncompete agreements (election year) that made it so that your previous employer could threaten you with thousands of dollars in court fees if you broke their irrational noncompete agreements, which could be as extreme as forbidding employment with a new company whose branches exist in the same states, for a years. Intentionally making it so that if you want to pursue other opportunities (higher wage, better benefits) you have to endure unemployment in your field for a prolonged period of time. Even unskilled labor like fast food and department store chains have noncompete agreements. It's all about stifling free market competition and forcing workers to put up with poor wages and working conditions.
There's a theme here; *we are bound to honor the contracts we make with corporations, but they are not*. When American politicians say they want to shrink the government, part of what they mean is that they want to remove the government departments and services that allow us to hold corporations accountable to their contracts. They are not intending to make life for the average person better or even strengthen the economy in a holistic sense (they favor the creation of monopolies over encouraging competition). They still just want to rig the game even more in favor of the wealthy to recreate feudalism.
@@TelvanniSpaceWizard I'm a venezuelan still living in Venezuela. I know health in the US is NOT a free market (is a cronies oligopoly) and I know, that socialism just doesn't work. Big States don't work.
Long live freedom!
That theory falls apart once you look at Europe pre-2008. The state was even bigger back then, and we managed to grow faster than the US.
It's very simple in my opinion. We are doing nothing as we watch all of our industry go down the drain. How many tech giants are there in Europe? How many of them formed in the last decade? 0? It's probably 0. How can we expect to generate the same value as the US does?
you can't force higher wages through. the low wages are a symptom of the economy being in shambles. if you raise the minimum wage now, companies will just raise the prices for the products and services.
Higher wages won't change anything. People will be forced to spend any change in their wages (and then some, going in debt) to comply with new EU ecological regulations (like those that prohibit gas as a source of heat in homes).
Problem with EU competetivnes is that companies are overly taxed and overly regulated, and higher wages won't help in anything, because EU will add even more taxes and regulations. It's just absurd at this point.
I mean that's a stupid thing to say. The question is not whether we need higher wages, but how to get there. Less regulation and more cooperation would help us get there.
Stuff like different laws, taxation, and languages are a huge barrier to doing business at the EU level.
Less regulation wouldn´t, there´s no evidence of this, also the US is regulated in quite a lot of ways actually, it tends to be very protectionist for one.
@@Letsthinkaboutit-mb7nn The USA is very regulated and their life is garbage in those areas.
On the other hand, it's much easier to do business in the USA than in most of Europe.
It's hard to say what Europe needs to do because Europe is many different countries that need different adjustments.
In general, it should be easy do to business and you shouldn't be punished with insane taxes if you do.
Switzerland is probably a good example of how Europe should be structured.
@@happy_thinking well, Switzerland is one country and it´s not insanely hard to do business in most of the Western EU, that´s an exaggeration.
Certainly just massively cutting regulations won´t do a lot. If that were the issue then third world African countries would be the richest places on the planet.
@@Letsthinkaboutit-mb7nn Like I said Switzerland is a good example.
Many EU countries do quite well when it comes to business I never claimed the opposite they just fall short when you compare them to more successful places.
I think your imagination when it comes to cutting regulations is too simplistic.
Instead of removal think more in terms of simplification. (Removal is also necessary in some countries)
African countries have a plethora of issues they need to address first.
Corruption in these countries is also mainly a result of too many regulations and heavy bureaucracy, but they have many other issues and it would take me hours to explain.
@@happy_thinking Corruption isn´t a result of too many regulations, that´s just not a causal explanation.
African countries in practise have no regulations quite often. I.e they in effect have no labour regulations, as there is no body to enforce any of them.
I don´t think I ever said either that regulations can´t be smarter or more simplified.
"Why US still misses basic worker's rights, public transport, healthcare and welfare protection"
Funny how most immigrants want to go to the USA and not to Socialist Nanny States in the EU?
Europe still needs higher wages though, just like the US shouldnt really go for a wage reduction.
The actual issue for both continents is wealth concentration, they have the money, but they insist on funneling it all to the top, and then act surprised when everybody below is increasingly more frustrated.
"cause we are not communist" lol
Quite a series of broad statements there. Made to soothe hurt feelings because Europe is no longer where it's at?
@@floxy20I mean it’s true though
One of the most concise and accurate analyses about the failures of austerity that I've seen to date. Thanks for the video.
Thank you for bringing such topics which is a diversification from the usual videos of partisan politics.
Europe has a tough time keeping it's industries from relocating elsewhere to begin with, paying people more only accelerates this unless there are appropriate counterbalances.
Well, there is a way in the long-term. But workers will not like it.
Some key industries are relocating due to lack of skilled workers. Not due to costs. High wages would improve retention and counter brain drains.
the world has changed in the last 20 years. with more trade restrictions and protectionism, outsourcing is becoming an increasingly bad business decision.
With protectionism on the rise, it will become more attractive to relocate back inside the EU than outside, even if there is a wage increase.
@@tru7hhimself That only applies if EU is willing to actually protect and/or invest in its local industries.
Higher wages in the EU without corresponding local protections/investment only gives incentive for companies to move to lower-cost countries. This could be China, India, Indonesia, LATAM...
Putting money in the hands of people who will spend it is a great way to put some health into an economy.
If the EU had invested in energy security, such as nuclear, there would be less instability and a significant shift in trade balances without funds being directed towards OPEC+.
Many people have been saying for over 10 years that austerity just stagnated the economy and harmed the citizens.
Higher wages means people can spend more, so money keeps flowing through the economy. Instead of uselessly sitting in some rich persons bank account.
We got 0,02% raise this year in our company, despite 4% inflation... There is a way to go. If we didn't have to migrate to Germoney or NL to get decent life, we would stick in Poland ahah
As a bilingual app support I gain less than a warehouse employee in NL or BE, while food prices almost match now with Poland.
it isn't much better in central europe. i've now had three wage agreements below inflation in a row in austria. (5% raise with 10% inflation, yay…)
Salaries in the Netherlands are decent, but the housing market is crazy, so if you don't have a house already, then you are not going to live that much better. And by "having" I mean one that is already paid or where you have a morgage.
7% pay rise, 18% year-on-year inflation here, so -11% real pay reduction...
higher wages also means more tax revenue which will be important to sustain the ageing population, as long as the salaries of the fewer younger people can keep up the social security programmes should be secure
Yup.
we could probably get a lot more out of a thorough audit and review of WHAT taxes are actually being spent on. The amount of money that is being mismanaged, and outright stolen could actually fund many useful projects.
But it also means proportionally higher costs for European goods and services, so what's the benefit?
@@Ruzzky_Bly4t an increased incentive towards investment to improve production instead of a shrinking industrial and public sector. Inflation right now is driven by this, not by there being too much demand.
@Terrorkarel Explain this, how will higher labour costs make European industry more competitive? It's getting outperformed in almost everything by cheaper labour in third world countries, hence why everything now is produced in South East Asia and not Europe or the US. Only high-end industries are still going, and you would increase the demand for their products, but also sabotage them through more expensive labour. The buying power of EU citizens stays the same due to higher costs. So what's the gain here?
Draghi isn't the one who incentivized the austerity. Actually the opposite, he made one of the most expansive measures named QE. In order to do that he has gone against the northern states such as germany and netherlands. But thanks to him, he kept the interests on debt low in mediterranean countries given their high share of debt to its gdp
I earn an average medium salary in my country. At the end of the month, I spent money on rent, on groceries on supermarket nearby, on basics (water, electricity, internet, phone) and maybe have a dinner out twice a month. And thats it. There are like 5 companies that earn money from me. How does an economy survives this way? I'll await this report with curiosity
Higher wages without higher productivity will only result in inflation. Higher wages in the US compared with Europe are the result of higher productivity. This raises the question as to why productivity in the US is so much higher 5han in Europe? Perhaps this is because of less regulation in the US, a less risk adverse approach to change, lower energy costs due to fracking, a more homogenous market due to a single dominant language. A more competitive education system.
The US has new industrial sectors (mostly Tech) and Europe killed what remained of it's productivity with cuts with austerity to safe a bunch of banks and pension funds.
@@Terrorkarel Austerity wasn't used to save banks or pension funds (which was a worthwhile aim) but rather to stop Government debt increasing even further as a percentage of GDP after the financial crisis was over. Much of Europe maintained an expansionary fiscal stance for the decade after the financial crisis. I don't believe that it has been a lack of aggregate demand that has hindered Europe, but rather constraints on aggregate supply, many of which were imposed by governments.
@@abdelghaniouchabane4277 Expanding the money supply beyond that associated with normal growth in GDP has little, if any, long term effect on the real economy (the "neutrality of money"). It can help when there's a liquidity crisis, as in 2008, or undermine real growth if it leads to a long period of inflation. A rapid expansion of US money supply would not account for a sustained period of real economic growth.
@@abdelghaniouchabane4277 I know!
@@abdelghaniouchabane4277 That sentence doesn't make sense!
To be honest the US are suffering from the same problems. Wages are a lot higher but the cost of living is wild af there. We're being collectively shafted.
I can't speak for European nations as I've only ever visited, but from the outside looking in, the US does not at all feel like it's better off. Wages are definitely not higher across the board. That's not until you get into higher tiers of white collar work, be it skilled work or a managerial/executive position, bankers, etc. The weakness or complete lack of effective social programs and public transit means we have a very high cost of living in a lot of the US. Many Americans are one medical emergency away from bankruptcy. On top of that, if you don't have much money and live in a dodgy area, having to worry about getting shot isn't the best.
From the outside looking in, the quality of life appears to be much better in at least some European countries compared to living in the US. It's why I'm jumping ship to Ireland in the fall to see if I have a better quality of life there than in the US.
Lol.Plumber in USA earns more then engineer in most european countries
Most Americans have a few thousands in savings. If you think a survey that came from a budgeting company with a low study population speaks better then government data, you are sub 90 IQ fodder at best. Also most crime is concentrated in few areas that are not suburbs that most Americans live in.
@@Hasanaljadid Depends on multiple factors, like the area the plumber works, their experience, whether they operate their own business or not. For the engineer, it depends where they work, their experience/position, and what kind of engineering.
Would a plumber in the Bay Area or NYC with decades of experience running their own business make more than a starting structural engineer in Greece? Absolutely.
Would an electrical engineer in Munich with decades of experience in a senior position make more than a new plumber starting at a company in Mississippi? Absolutely.
That being said, the cost of living varies wildly across the US and across European nations as well.
@@Hasanaljadidto be honest, plumbers are traditionally quite a well-paid profession
As an American, I find myself continually frustrated by my country's protectionism. I think we should foster American industry, but I also think that trying to be completely self-sufficient is a terrible idea and won't work, even for us. What we should be doing is increasing trade ties with our allies in Europe. There are things Europe makes that we want. European evs are objectively way better than the shit boxes Tesla and American ev manufacturers make. Not to mention, European beauty products are insanely popular here. In my experience, most good reliable shampoos and soaps are French in origin, not American. I love the EU, I think structurally it's a great idea, and I want to see it succeed, America should be willing to help. Thats my two-cents on the matter.
What protectionism? Europe exports over $100Bn more in goods to the US than the US exports to the EU. That it decided that certain key industries are interests of national security doesn't mean that it is some closed economy. Europeans are pretending that losing a few billion in export surplus is the cause of their economic woes when it is long standing structural issues.
Potentially, enforcing 4 day workweek with the same pay, will technically increase the hourly pay and leave more time to spend the money
And will reduce the work done by employees. It's just a trade-off.
@@Ruzzky_Bly4t nobody is productive 8 hrs a day 5 days a week. It will mainly reduce idle time. There have been studies that showed productivity actually increased with 4 days workweek
Spend money on what when you dont have enough for anything since everything is so expensive
More free time for a second job more like...
@ChangesOfTomorrow That would be great then, would be interesting to see how it would work
@@Ruzzky_Bly4t there are studies and pilots from the past that have shown that a 4-day work week might actually be more productive than a 5-day work week.
several reasons why this might be the case:
- as mentioned no one is 40 hours a week efficient. at the start of the day most have to get into it, the last hours of the day are just wishing the day was over already.
- if you have one extra day to spend on things you like to do, hobby's, being with family etc. it makes you happier. and happier people often deliver better work.
and 2 things that might happen because of people having more free time:
- people might fill (some of) that extra free time by being a volunteer, for example helping out at a retirement home or at the local animal shelter.
this in turn makes the community a better place, and raises happiness even more.
- if people work less they probably have less work related issues. which saves money in (mental) healthcare and social benefits.
l can tell you for a fact that France would absolutely not cooperate fully with the rest of Europe when it comes to the military; the channel Task & Purpose made a video a month ago that explains why in detail, but basically France began loathing the idea of relying upon other countries for its military ever since the 1950s -- which is also why they became a nuclear power back then as well -- to the point that it even has a special status within NATO now where its own military *_can help_* the other countries but *_will not take orders_* from them or anyone else.
That's a strong mischaracterisation as there's a difference between "not fully cooperating with NATO" and "not cooperating with European allies". France has resisted NATO since the 1950s because the French have always seen it as a tool of American imperialism and French have always wanted to be independent of American control, but France has always been very open to deeper military cooperation with EU allies (and specifically the EU, that's why de Gaulle was against Britain joining the EC as he saw it as American entry by the backdoor). Just recently Macron again repeated a long standing French offer to share French nukes with the EU and France and Germany reached a breakthrough to jointly develop next generation tank for use by European armies.
@@Dendarang
...To be fair, l was a bit harsh in my wording yes, but l still don't believe France would allow other european countries to take command of its military even if NATO was purely european and America wasn't included; providing nuclear deterrence, sure, joint weapon development, why not, but that's about as far as it's gonna get in terms of guarantees from it -- even if l myself agree that a united european military force seems more feasible now than ever, at least on paper.
A big point people are missing is automation!
If you increase wages, yes, you will increase consumption but you will also increase costs. What's more is that you will probably run into trade deficits because we don't manufacture things in Europe anymore and while service's account for a lot of condumption, physical goods are still needed.
The only effective way of escaping this paradox is to automate. Europe has a terrible track record in this and seems to continue to do so.
I've seen parties propose taxes on automation which is absolutely ridiculous. We need more automation to bring more industry in shore and help the physical goods side of economy otherwise the higher wage model will break once debt limits are inevitably reached.
Also, about the US dollar being the reserve currency, it doesn't necessarily have to be that way since there is no gold standar anymore. The Euro's usage rose significantly since its inception and there's no reason why it should be inferior to the dollar. The recent debate on politicizing the Euro are cause for concern though
I have a small software company. USA clients come to me _BECAUSE_ they know they can pay us less. You can't really change this, they'd go to India instead.
Honestly it's not so bad. Just move away from the big cities and you're fine. Who wants to live in London? Or Paris? Or Madrid? Those places are gigantic and expensive.
If you don’t mind me asking, but where do you operate your small software company?
As for Madrid, London and Paris, you can’t really blame people wanting to live in those cities as the countries the cities are located in have centralised their job opportunities in just one place.
@@Slippin_Jimmy1012 A small city of less than 500K people.
But I've seen so many people saying "pLeAsE GiVe mE FuLl ReMoTe JoBs" while living in Munich or Copenhagen. Get it together, you can live somewhere cheap and _then_ get the remote job, derp.
There are jobs which are too poorly remunerated (e.g. many vital workers) but there are also plenty of jobs with a remuneration way beyond what's needed for a comfortable life. If you want to increase the general purchasing power you should invest in those who are the poorest in each country, since they are the ones who have immediate spending-requirements. I.e., redistribute wealth from the rich and achieve a more fair and balanced consumption. And take out "excessive remuneration" (very high wages) in form of fewer work days, longer holidays, etc. We have an environmental issue to deal with too and it doesn't benefit from excessive consumption.
Besides, nothing in Draghi's plans seems to actually protect EU industries from e.g. foreign buyouts (i.e. us losing control). If you don't want important industries to be owned and controlled by non-europeans then you'll simply just have to ban such ownership.
That's one way to force every rich person to flee the continent, and for every entrepreneur to go to a country that will let them keep their wealth if they succeed.
@@Ruzzky_Bly4t I don’t think it would cause people to flee. And those who left, it would be an acceptable cost..
The wealth of the rich (just like any others’) are dependent on the welfare of the general society. If you remove or decrease the purchasing-power of the general public then you end up hurting everyone else, including the rich. That’s a core-point of why austerity-policies are such a through-and-through failure. If you don’t have enough purchasing-power in the public then the economy won’t work. You need to redistribute wealth, circulate capital. Preferably that would happen naturally by sufficient remuneration, but in our society it is also aided through e.g. taxation which is spent on benefits (e.g. education and child-support), on investments in infrastructure, etc. I figure we should remember that e.g. the US was at its greatest while their taxes were at their highest - which encouraged e.g. more investments in the companies and higher wages.
Wealth gradually accumulates with capital-owners (capitalists). It’s a fundamental 101 of capitalism. This is also a fundamental failure of capitalism. At its logical peak with all the capital accumulated with one capitalist society will come to a stand-still followed by an implosion, albeit that the implosion is likely to happen way before total accumulation is achieved.
Also then, does it really matter if the capitalists leave? The goal is to increase the public’s purchasing-power and increase European control over industrial sectors. It essentially means shifting profits over from the capital-owner to workers and it means stricter rules regarding ownership. Assuming that we have stricter rules then why would the capitalist move? It would mean that they lose ownership of the company. The entire point is that if the capitalist rich leaves then they should lose their wealth, their capital in the form of e.g. a company - it's protectionism, protecting Europe and ensuring European control at the expense of other non-europeans, may it be at the expense of a country such as the US or may it be at the expense of a US capitalist born in Europe. Transfer the ownership (buy them out) to a more useful, loyal local capitalist or why not the workers themselves (hence further increasing the public's purchasing-power). As for entrepreneurs and investors - I don’t think we’ll lack them as long as rule-abiding capital is protected. I’d rather assume that locally-owned small and medium-sized industries would benefit the most from the local population having an increased purchasing-power.
another way is by nationalising key industries. otherwise the profits are siphoned off into tax havens.
@@gus3000Europe's existing attitudes towards new business and accompanying investment has already caused plenty of entrepreneurs to head to the US. E.G Stripe was started by two Irish blokes but went to the U.S for their IPO, and this is far from the only example. That's a good amount of potentially high-paying jobs and accompanying institutional capital that which could've been in the EU but went to the US instead.
@@Ruzzky_Bly4tguess who won’t leave the union. Several millionaires in the entertainment (especially sports) industry.
As a Brit that moved to the US right after uni, it’s insane to compare the disposable income between me and my peers in the UK.
The standard of living and incomes here stateside are so much better.
Higher wages with internal incentives to bolster the internal demand like subsidized loans for business development. If you increase tariffs on the US or China as a means for business development there could be retaliation and an economic cold war. I think when Russia is done the EU could also benefit from the development of Ukraine and building it back up if they have the resources. Inflation and growth are the two factors. Best monetary location for economic growth and internal business development (Opposite of the yield curve inversion) is where the 10 year is twice the 5 year in interest rate. 9 times out of 10 the economic growth will be in the next year and then the following year interest rates will need to be raised. New Zealand's 2% worked because they were able to grow GDP at 3% and if you focus on the net and know the sweet spot of GDP then you know you can manage it well. I would say for long term growth 0.5% after inflation is a fair goal per year or 1%. Anything over 10% is unsustainable in GDP growth. I think the global economies saw what New Zealand did and thought that the 2% inflation target worked best. The key is to get the normal distribution on your side and manage them both to where inflation is around 2% and GDP growth is around 2.5% if you can. If wages grow too fast too soon, then what you have is inflation that will spiral out of control and the only way out is through raising rates and decreasing the money supply like what we are seeing now in the US and world.
love your videos. in the map 6:08 is mistake, croatia has also the Euro
Världsmästerskapen i friidrott 1995 t-shirt... That's not something ya see every day
Yeah damn, I was taken aback.
Undrar starkt var han fick den tröjan ifrån. Blev lite tagen av att se en sån tröja, speciellt på en sån här video
Although the title of the video focuses on the wages part, the other two topics discussed are also really important. The EU as a whole spends 3x more than Russia does on defense, yet we are wildly unprepared for confrontation if it happens. If the EU as a whole started doing joint procurement we could probably spend less money than we do now, which means using that money for other things like infrastructure or social, and still end up with better defense than we have now.
Its quite simple really, drop taxes, drop regulations, and just generally get the state out of the way in the economy. This has literally worked for every country every single time.
This is ridicolus. Wages cannot decoupled from productivity. Europe's problem is not too little spending but too little innovation, too little productivity and insane amounts of bureaucracy that kills start-ups. Starting the printing press will not solve anything
Focussing on productivity without focussing on purchasing power. Yeah.. That's going to work "clown face". Who is going to buy it then?
i am amazed that it took "the experts" 15 years to understand something that me, a normal idiot, understood the moment the crisis happened. smh.
Problem is you dont!
Just as 99% of the population!
@@tobiasphilippwittlinger8753 right... Because austerity worked wonders right? On the other hand Obama spending almost a trillion worked so.. I think you don't know what you are talking about.
@@nickt2822 I know very well what the problem is(!) and the people that cause it are utterly incompetent!
It has to do with statehood, not with the private sector!
The raise in wages must come by tax cuts for low incomes by 100% middle incomes minimum 50% and high incomes by at least 10%.
Consume taxes differ greatly but should not be highter than 5%.
In a nutshell for you the state aquires too much money!
Do you even know what would happen if wages would be raised by say 35%?
@@tobiasphilippwittlinger8753 ummm the 2008 financial crisis was caused by the banking sector. Countries like Spain got massively into public debt buying up the bad debt of the the banks (which are in the private sector).
@@melissacorbett4180 Correction it was caused by the American banking sector which gave loans incentivized from the state that lowered the requirements for loans in order to make more people hown owners.
Yess they did bale them out but not with tax money, the toxic positions were just transfered into the balance of the central bank.
However what has this to do with the fact that states tax heavily?
Anyway the real question in regard to your point is should national banks bale out private banks?
I think no!
They never learn it if they get baled out everytime they mess up!
Higher wages aren't the solution to our problems, they'll only accelerate cost of living, taxes, inflation.
I've been saving to buy a house for over 15 years, and each increase in wages has resulted in my money being worth less, whilst everything is getting more expensive.
Save the people, not the EU.
Higher wages and salaries means companies will have to increase the prices of their products and services to recover this higher expenses and when prices increases, things start becoming unaffordable again due to higher inflation. So there has to be a fine balance between salaries and business costs so that economy remains stable and life is easy for everyone.😎😎😎
That is mostly true for services where wages are a big component of the final price charged, not so much for goods and commodities.
Anyhow, since you're so sure of the stuff you read in your Economics textbook: how did large scale inflation happen in Europe in spite of wages having been suppressed for 10-15 years?
Under 100 views gang
Smart man.
My company in France hired me end of 2022.
Inflation rate in 2022 and 2023 were both around 5%.
I got a wage increase of 3,5% in 2024.
I normally love TLDR videos like the last three videos, I can't help but be like " I can't believe this is news as experts have been saying this for years".
So I studied political science. That's what I got my bachelor's in, I currently work for an economic development firm that does work internationally.
For the last 10 or 15 years, economic experts have been calling for increased wages in Europe via bilateral trade partnerships with its North American partners.
The proposal said that as the US and Canada produce more oil it should be prioritized and shipped to European partners.
As Mexico looks looks to become the new China or a powerhouse in global manufacturing.
Increased bilateral trade between the European and North American continent is only more necessary.
If the US and Europe jointly came to large-scale investment agreements on the topics of " Green energy, biofuels, telecommunications, ship building, and Aviation" it would substantially increase wealth on both continents.
By heavily investing in wind, solar, water, and nuclear continents could become energy self-sufficient.
Biofuels could easily replace plastics and other necessary petroleum products, thus reducing both countries, dependencies, and actually increasing agriculture and manufacturing exports.
Increasing telecommunications just means that the will be able to conduct commerce more easily
Increases in aviation and ship building will allow them to increase their militaries, decrease shipping cost, have more control over global supply chains, and increase innovation.
Global experts have been calling for this for years, but countries don't want to enact on it because most populations see it as somebody else is getting a better deal than they are when they don't realize the long-term gains.
I believe it was 2019-2020 when the last study was done and it predicted that if the US and the EU agreed to about 1.1 to 1.4 trillion over 10 years to Target these industries. It would lead to massive long-term growth.
The UK needs lower taxes especially for the bottom 30%
The UK already has lower taxes for lower incomes. UK is one of the few countries in Europe that has a scaling taxation system and it's awesome for those that want to grow and evolve
@@Twin.motors It's not, because as soon as you rise up the tax brackets very punitive tax rates kick in. It's actually been rated as one of the most unfair in the world, a perfect example of poorly executed progressive taxation.
@@pritapp788 can't speak for everyone but back when I lived in the UK the low taxes helped me out enormously when I barely had many to survive and once I got going yes the taxes were high but overall I felt it was benefcial for me
@@Twin.motorsall of Europe have progressive/scaling taxation except Russia
@@esanahka9284 Romania doesn't have that
High taxes + demanding high wages. Small business are going to be destroyed😢
Small businesses should be taxed the least, i cant understand why they tax them so much.
@@mikel9138 that's why in Italy half of the revenue is kept away from taxes (aka "black market")
4:39 this is why a famous austrian painter wanted to conquer Russia , 6:00 we did low wages but without cutting in social spending, 6:36 ironic that we made the EU as this single great market , but we are worried about other markets more
Austerity for 10-12 years fucked the economic basis of Europe and instead vastly enriched the wealthiest 1% - the people who contribute the least to a thriving national economy.
Europe needs a "new deal" with investments into social, educational and health structures and a strong counter on corporate and personal tax avoidance (and evasion).
Perhaps a (lower) tax on revenue instead of profit over a certain threshold? It would certainly make corporations actually pay their share...
The problem is actually poor politicians... I live in germany and as my old econ professor (who's been taught by a member of the former "5 econ-elders")has put it, we have literal idiots installed in the most important sectors of our politics... He went on an hour rant once starting off with the explanation of how "when he says idiots" he doesn't mean it as an insult but as the literal greek meaning of incompetence and ending it with listing every major bill that has been past by congress during that legislation and what their consequences will be in the future.
Now almost 5 years later and almost everything he estimated has come true.
So yeah we choose to destroy ourselves by having idiots elect other idiots.
How about instead of inflating everything, we accept slow growth or even stagnation?
EU does the very opposite of protectionism - double standards for domestic and International manufacturers. Companies in Europe must adhere to strict environmental and social guidelines whilst at the same time Chinese companies have to do none of that. These two entities then compete on the "free market". It is not difficult to see who is winning and who is losing..
The capitalists have told Europe..you can have universal healthcare (which costs higher taxes) or you can have higher wages. But not both. That money needs to go to the CEOs
Sick t-shirt
@@JG-MV Nothing, just says "Göteborg" on it
Basically make the European Union a country. Raise government R&D and wages to try and boost investment into Europe while trying to be first to the next big innovation.
California introduces higher minimum wages ... Also California, small businesses increase product prices, sack workers and close down in record levels.
Market forces dictate wages not governments!
I didn't understood where the salaries increase would come from? Without efficiency gains salary increases would push inflation up again.
Where would the gains of efficiency come from? No plans for modernising the industry, or digitisation or reduction of regulation.
This would be an (E)U-Turn
Wages can only be as high as the market requires. Artificially tacking the price of labor higher than the market sets just destroys jobs and kills the entire entry level market for young people.
Then jobs that require high school level education suddenly demand a PhD for minimum wage pay.
European wages are below the market value. They've been kept low artificially, that's the problem.
@@Terrorkarel if the government hasn't pinned them low by Fiat then they are market value. Automation pressures wages down.
@@gungan5822 They are market value, but many European governments especially Germany have manipulated the market in order to keep wages low and exports high.
@@user-uf4rx5ih3v Clearly government interventionism needs to be a crime then. There are less than a handful of instances in all of recorded history where intervention from government has had a positive result.
@@Terrorkarel Well we would have to look into it deeper as for example in Czechia you cost your Employer much more than what is your gross wage as your employer has to pay another 25 % of your gross wage directly government so if average wage is 43k CZK, then that person costs the employer about 57k CZK. So in order to get clear picture we should compare not only the gross wages, but gross wages and other fees paid.