Germany is weighing sweeping pension changes, including raising the retirement age to 70. Meanwhile, football fans are celebrating after the men's national side qualified for the World Cup knockout stage.
And on what your pay would be based ? The hours you work or the productivity ?
As I said, I agree that some of the productivity gains tranfer to the worker pay.
I simply do not belive that even if this trasfer happens then you can retire earlier having a longer live expectancy.
We can maybe work less every day for the same pay, like we work 7 hours a day and the hours we pool are used to hire some more workers, but that would not change the problem with retiring earlier and living longer (which are not problems per se)
Why not, though?
Because that could be applied also to you, I bet you are richer than someone else.
In the end, once someone pay their fair share of taxes the question is over. How much money is left to the someone is irrelevant.
We can discuss how to make the rich pay their fair share of taxes eventually.
You asked about maintaining wealth and not expanding wealth. Productivity is output per work. If the output per work grows, we need less work to maintain the current output --> workers can chill more. Whether they retire earlier or have a 4-day-week.
Right now that surplus of productivity is just grabbed by the owning class.
once someone pay their fair share of taxes the question is over.
Yeah, right. And if our society wants to take that fair share to expand retirement for everybody, that’s cool. And to what a ‘fair share’ is…that depends. In Germany in the 50ies they basically took 50% of everybodys assets and had an maximum income tax bracket of 95% (which would start at 850k € yearly income today, if they had kept it), literally a max income, if you want. And apparently people thought that to be fair, so there’s that.
You asked about maintaining wealth and not expanding wealth. Productivity is output per work. If the output per work grows, we need less work to maintain the current output --> workers can chill more. Whether they retire earlier or have a 4-day-week.
A 4 day week could be done, but I still think that we cannot retire earlier since we live longer. There would be a imbalance between the time we work (that gets shorter) and the time we spend retired (which get longer). But to pay for the longer retire time you need somehow have put aside more money. If we talk about a couple of years then ok, maybe we can retire earlier if we get paid more (given the higher productivity), but if we talk about longer period then I don’t think we could be find a stable solution.
The only real solution, in my opinion, is that you can retire after how many years you want but your pension is proportional to what you set aside during your working life (with the state that only pay the gap between what you get and a minimum level of sussistence). This way you can work as long as you want and if you want to retire earlier this decision is not paid by others. The additional bonus is that I think that in the end people would try to be paid more to put aside more (if they want to retire early)
Right now that surplus of productivity is just grabbed by the owning class.
Not totally I think. I am sure I have a better life than my parent (at the same age) or my grandparents.
Yeah, right. And if our society wants to take that fair share to expand retirement for everybody, that’s cool. And to what a ‘fair share’ is…that depends. In Germany in the 50ies they basically took 50% of everybodys assets and had an maximum income tax bracket of 95% (which would start at 850k € yearly income today, if they had kept it), literally a max income, if you want. And apparently people thought that to be fair, so there’s that.
If people thought that to be fair then the 95% tax bracket would be still be there.
Obviously, no one thinks it’s “fair” to work for about 1 million euros and end up with the same salary as someone who works to earn 10% of that amount.
A 4 day week could be done, but I still think that we cannot retire earlier since we live longer
Does not compute. If you can reduce your work load by 20% (4 days instead of 5), you could retire earlier instead. When in life you reduce those 20% does not matter. And life expectancy is not expected to grow by 20% out of the sudden. So there’s plenty of room. If anything, life expectancy will shrink dramatically with climate change.
But to pay for the longer retire time you need somehow have put aside more money
Yep, if society burdens the individual with the planning of their retirement economics. You could also just expand the pension system, or have whatever funny idea ¯\_(ツ)_/¯.
Look, if we think about western, wealthy societies: if e.g. in Germany tomorrow we have like 2 million more pensioners out of the sudden…do we have a problem supplying them? As in, will supermarkets struggle to provide the food, so that they can eat? Do the houses they live in just vanish? Are clothing stores immediately empty, and they need to freeze during winter?
I’d say no, that wouldn’t happen. They would only struggle, because somehow they would not have the money to buy those things, the society still has the means to supply them. So it just is a matter of monetary distribution. And the distribution of said monetary resources is just shit currently, namely to the disadvantage of the poor, the working people and pensioneers. We could fix that.
Obviously, no one thinks
Yeah, right, “obviously no one” 🙄. Except for a lot of people that is not fair. But those are “no one”, I see. I, for once, am fine with different compensations. But when people work and cannot afford basic necessities, while others rake in thousands or even millions per day (and even pay less taxes on average, because the tax system favors income from assets over income from work)…that’s where ‘fair’ stops.
It’s funny, that everybody wants a ‘Wirtschaftswunder’ back. As it happens, said ‘Wirtschaftswunder’ was happening, because the state redistributed wealth to a crazy high degree. But nobody wants to make that connection, because that would mean an ugly fight with the owners. So no ‘Wirtschaftswunder’ for us, instead low salaries and crumbling infrastructure ¯\_(ツ)_/¯.
A 4 day week could be done, but I still think that we cannot retire earlier since we live longer
Does not compute. If you can reduce your work load by 20% (4 days instead of 5), you could retire earlier instead. When in life you reduce those 20% does not matter. And life expectancy is not expected to grow by 20% out of the sudden. So there’s plenty of room. If anything, life expectancy will shrink dramatically with climate change.
Work load != working life duration.
I can work 4 days a week and produce the same output, no doubt, and I can be paid the same, no problem here.
Then I want to to retire earlier, so fewer years worked, resulting in a lower pension contribution which should be paid for more years. And this is the “problem”, in total I contribute less (less years worked) but I want to get back more.
Put it another way, you go to deposit in a bank 1000 euros, you get some interested (for sake of simplicity let’s say 1%) but at the end of the year you want a result like you deposited 1500 euros instead of the 1000, and the difference to be paid by someone else with more money.
I’d say no, that wouldn’t happen. They would only struggle, because somehow they would not have the money to buy those things, the society still has the means to supply them. So it just is a matter of monetary distribution. And the distribution of said monetary resources is just shit currently, namely to the disadvantage of the poor, the working people and pensioneers. We could fix that.
The society has means to supply them at a basic level of sussistence, no more. And while I agree that the distribution of monetary resources is shit I don’t think is the root cause.
Again, you cannot think that you can work less years to retire younger while keeping the same standard of living for a longer retirement period. Or better, you can wanto to do it and leave the consequences to someone in the future.
Obviously, no one thinks
Yeah, right, “obviously no one” 🙄. Except for a lot of people that is not fair.
Then why it is not still here ?
But those are “no one”, I see.
People get the government they voted for…
I, for once, am fine with different compensations. But when people work and cannot afford basic necessities, while others rake in thousands or even millions per day (and even pay less taxes on average, because the tax system favors income from assets over income from work)…that’s where ‘fair’ stops.
So the correct solution is to make possible for the working people to be paid more, not to go after the rich just because they are rich.
I never undestood the logic that to elevate someone you need to bring down someone else.
It’s funny, that everybody wants a ‘Wirtschaftswunder’ back. As it happens, said ‘Wirtschaftswunder’ was happening, because the state redistributed wealth to a crazy high degree. But nobody wants to make that connection, because that would mean an ugly fight with the owners. So no ‘Wirtschaftswunder’ for us, instead low salaries and crumbling infrastructure ¯_(ツ)_/¯.
The “Wirtschaftswunder” happened because there were also the conditions to happen, not just because the state redistributed wealth left and right.
Then I want to to retire earlier, so fewer years worked
While I believe, that even a 4 day week and earlier retirement is possible, that was not the premise in our discussion. The premise was, that one could reduce work time. And if you can do a 4 day week, you could also do a 5-day week and retire earlier. After all, the output produced during your lifetime would be the same. So, if one is possible, the other is as well.
The society has means to supply them at a basic level of sussistence, no more
Even more. Do you think Amazon would run out of flatscreens in our hypothetical scenario? I doubt it. Probably not everybody could receive a 70 ft Yacht, but the vast majority could not afford that nowadays or if they worked, idk, three years longer ¯_(ツ)_/¯. We could easily sustain the hypouhetical retirees life standard, ez.
not just because the state redistributed wealth left and right.
That was the main contributing factor, though. It is easier, when the country is in ruins and everybody is piss poor. But after the recent years we approach the latter once again. But with what the redistribution helps: money is spend fast. That is important for the economy to flourish and everybody profiting from it. Right now, the surplus is pocketed and ‘invested’ in real estate, or shares. That does not help anybody. If you hand that money to people with no assets, they buy shit. Cars, food, gardening tools, whatever. Then production is expanded, workers are paid more. As a government you have to make the money flow around. Easiest way to achieve that? Be Robin Hood and give to the poor. They will spend the money.
While I believe, that even a 4 day week and earlier retirement is possible, that was not the premise in our discussion. The premise was, that one could reduce work time. And if you can do a 4 day week, you could also do a 5-day week and retire earlier. After all, the output produced during your lifetime would be the same. So, if one is possible, the other is as well.
I think you are confusing work output with working time.
If we look only at what you produced during your working life then you are right, we can probably retire earlier having already produced our share of “something”.
The problem is that what we put aside is not proportional to the output (rightly) but to the time we work so if we retire earlier we miss some time during which we built our retirement fund (whatever it is) while expecting to live longer at the same time.
And while this can work in small numbers, it not work if you extend to the whole society.
The society has means to supply them at a basic level of sussistence, no more
Even more. Do you think Amazon would run out of flatscreens in our hypothetical scenario? I doubt it. Probably not everybody could receive a 70 ft Yacht, but the vast majority could not afford that nowadays or if they worked, idk, three years longer ¯(ツ)/¯. We could easily sustain the hypouhetical retirees life standard, ez.
No, but who pay for them ?
Tax the rich ? Right. Let’s make an example: if we consider to tax the rich for 10.000.000.000 euros/year this means that every retired in Italy (about 23.000.000) get about 435 euro/year.
Even if the number of retirees whose pensions need to be supplemented were halved we just get a little less of 1000 euro/year. Too less to have any significance.
I think you should find the money some other ways.
That was the main contributing factor, though. It is easier, when the country is in ruins and everybody is piss poor. But after the recent years we approach the latter once again. But with what the redistribution helps: money is spend fast. That is important for the economy to flourish and everybody profiting from it.
I don’t see how we are approaching a similar scenario, if nothing else because we are not a pile of rubble again (hopefully).
Then production is expanded, workers are paid more. As a government you have to make the money flow around.
Except production is no more here, so you cannot pay the worker more as there are no (well, less) workers.
Easiest way to achieve that? Be Robin Hood and give to the poor. They will spend the money.
For the first or second year, then the rich would have nothing more or, more probable, moved their money out of your reach and you will be left with nothing.
if we retire earlier we miss some time during which we built our retirement fund
What? If the worker gets a fair share of the productivity gains, they have higher salaries. They can put more in their retirement fund and could work less.
See that graph:
Productivity gains vs. salaries. That is what was stolen since the mid-seventies. Salaries, on average, should be double as high. You could basically set aside one month of living per month (and earn interest on it). Where did the monetary gains go instead? Into assets of the wealthy, they just did not vanish under mysterious circumstances.
People just underestimate how hard they got robbed, if they even consider that they were robbed, that is.
Tax the rich ? Right. Let’s make an example
Let’s make a better example. Why only 10 billion per year? Like, the private assets of German citizens are estimated around 5-6 trillion Euro. If we estimate like 6% interest (long-term gains on the financial market, evan higher the last few years, but granted, it’s hot), that is 320 billion capital gains alone, per year. Take a meager 10% and you have 32 billion already, or you could go harder, why not? After all people still earn money.
Take as an example the Quandt family: they “earn” 500 million cash(!) on BMW dividends alone, but pay less than 1% tax on those earnings. Why do I pay like 32% on average on my income from work, while they almost pay nothing for doing nothing?
Tax inheritance accordingly. People can inherit like 100 million and never have to think about anything in their life. Why should they inherit billions?
100 billion estimated losses through tax evasion estimated in Germany, each year.
If we do all that, and still cannot afford less work for everybody, OK, I am convinced then. But not before the rich get taxed properly.
how we are approaching a similar scenario
I don’t know, have you looked around? Public infrastructure crumbles, people cannot afford basic necessities anymore. Funnily enough prime “Wirtschaftswunder” was in the sixeties, the rubble already gone.
Except production is no more here
Investments by the state are usually very locally sourced, as the state pays workers here, or invests in infrastructure. You buy flatscreens in China, allright, but you build streets, railways, bridges and public pools right here.
For the first or second year, then the rich would have nothing more or, more probable, moved their money out of your reach
It’s not like there’s nothing you could do against that. Tax duties come with citizenship, like the U.S. does. Tax when people shift their assets away. A lot of assets cannot be shifted anyway. Look at the Schwartz or Abrecht families. Their assets are like thousands of supermarkets. Can they just pack them up and move them elsewhere? I doubt it.
Productivity gains.
Why not, though?
And on what your pay would be based ? The hours you work or the productivity ?
As I said, I agree that some of the productivity gains tranfer to the worker pay.
I simply do not belive that even if this trasfer happens then you can retire earlier having a longer live expectancy.
We can maybe work less every day for the same pay, like we work 7 hours a day and the hours we pool are used to hire some more workers, but that would not change the problem with retiring earlier and living longer (which are not problems per se)
Because that could be applied also to you, I bet you are richer than someone else.
In the end, once someone pay their fair share of taxes the question is over. How much money is left to the someone is irrelevant.
We can discuss how to make the rich pay their fair share of taxes eventually.
You asked about maintaining wealth and not expanding wealth. Productivity is output per work. If the output per work grows, we need less work to maintain the current output --> workers can chill more. Whether they retire earlier or have a 4-day-week.
Right now that surplus of productivity is just grabbed by the owning class.
Yeah, right. And if our society wants to take that fair share to expand retirement for everybody, that’s cool. And to what a ‘fair share’ is…that depends. In Germany in the 50ies they basically took 50% of everybodys assets and had an maximum income tax bracket of 95% (which would start at 850k € yearly income today, if they had kept it), literally a max income, if you want. And apparently people thought that to be fair, so there’s that.
A 4 day week could be done, but I still think that we cannot retire earlier since we live longer. There would be a imbalance between the time we work (that gets shorter) and the time we spend retired (which get longer). But to pay for the longer retire time you need somehow have put aside more money. If we talk about a couple of years then ok, maybe we can retire earlier if we get paid more (given the higher productivity), but if we talk about longer period then I don’t think we could be find a stable solution.
The only real solution, in my opinion, is that you can retire after how many years you want but your pension is proportional to what you set aside during your working life (with the state that only pay the gap between what you get and a minimum level of sussistence). This way you can work as long as you want and if you want to retire earlier this decision is not paid by others. The additional bonus is that I think that in the end people would try to be paid more to put aside more (if they want to retire early)
Not totally I think. I am sure I have a better life than my parent (at the same age) or my grandparents.
If people thought that to be fair then the 95% tax bracket would be still be there.
Obviously, no one thinks it’s “fair” to work for about 1 million euros and end up with the same salary as someone who works to earn 10% of that amount.
Does not compute. If you can reduce your work load by 20% (4 days instead of 5), you could retire earlier instead. When in life you reduce those 20% does not matter. And life expectancy is not expected to grow by 20% out of the sudden. So there’s plenty of room. If anything, life expectancy will shrink dramatically with climate change.
Yep, if society burdens the individual with the planning of their retirement economics. You could also just expand the pension system, or have whatever funny idea ¯\_(ツ)_/¯.
Look, if we think about western, wealthy societies: if e.g. in Germany tomorrow we have like 2 million more pensioners out of the sudden…do we have a problem supplying them? As in, will supermarkets struggle to provide the food, so that they can eat? Do the houses they live in just vanish? Are clothing stores immediately empty, and they need to freeze during winter?
I’d say no, that wouldn’t happen. They would only struggle, because somehow they would not have the money to buy those things, the society still has the means to supply them. So it just is a matter of monetary distribution. And the distribution of said monetary resources is just shit currently, namely to the disadvantage of the poor, the working people and pensioneers. We could fix that.
Yeah, right, “obviously no one” 🙄. Except for a lot of people that is not fair. But those are “no one”, I see. I, for once, am fine with different compensations. But when people work and cannot afford basic necessities, while others rake in thousands or even millions per day (and even pay less taxes on average, because the tax system favors income from assets over income from work)…that’s where ‘fair’ stops.
It’s funny, that everybody wants a ‘Wirtschaftswunder’ back. As it happens, said ‘Wirtschaftswunder’ was happening, because the state redistributed wealth to a crazy high degree. But nobody wants to make that connection, because that would mean an ugly fight with the owners. So no ‘Wirtschaftswunder’ for us, instead low salaries and crumbling infrastructure ¯\_(ツ)_/¯.
Work load != working life duration.
I can work 4 days a week and produce the same output, no doubt, and I can be paid the same, no problem here.
Then I want to to retire earlier, so fewer years worked, resulting in a lower pension contribution which should be paid for more years. And this is the “problem”, in total I contribute less (less years worked) but I want to get back more.
Put it another way, you go to deposit in a bank 1000 euros, you get some interested (for sake of simplicity let’s say 1%) but at the end of the year you want a result like you deposited 1500 euros instead of the 1000, and the difference to be paid by someone else with more money.
The society has means to supply them at a basic level of sussistence, no more. And while I agree that the distribution of monetary resources is shit I don’t think is the root cause.
Again, you cannot think that you can work less years to retire younger while keeping the same standard of living for a longer retirement period. Or better, you can wanto to do it and leave the consequences to someone in the future.
Then why it is not still here ?
People get the government they voted for…
So the correct solution is to make possible for the working people to be paid more, not to go after the rich just because they are rich.
I never undestood the logic that to elevate someone you need to bring down someone else.
The “Wirtschaftswunder” happened because there were also the conditions to happen, not just because the state redistributed wealth left and right.
While I believe, that even a 4 day week and earlier retirement is possible, that was not the premise in our discussion. The premise was, that one could reduce work time. And if you can do a 4 day week, you could also do a 5-day week and retire earlier. After all, the output produced during your lifetime would be the same. So, if one is possible, the other is as well.
Even more. Do you think Amazon would run out of flatscreens in our hypothetical scenario? I doubt it. Probably not everybody could receive a 70 ft Yacht, but the vast majority could not afford that nowadays or if they worked, idk, three years longer ¯_(ツ)_/¯. We could easily sustain the hypouhetical retirees life standard, ez.
That was the main contributing factor, though. It is easier, when the country is in ruins and everybody is piss poor. But after the recent years we approach the latter once again. But with what the redistribution helps: money is spend fast. That is important for the economy to flourish and everybody profiting from it. Right now, the surplus is pocketed and ‘invested’ in real estate, or shares. That does not help anybody. If you hand that money to people with no assets, they buy shit. Cars, food, gardening tools, whatever. Then production is expanded, workers are paid more. As a government you have to make the money flow around. Easiest way to achieve that? Be Robin Hood and give to the poor. They will spend the money.
I think you are confusing work output with working time. If we look only at what you produced during your working life then you are right, we can probably retire earlier having already produced our share of “something”.
The problem is that what we put aside is not proportional to the output (rightly) but to the time we work so if we retire earlier we miss some time during which we built our retirement fund (whatever it is) while expecting to live longer at the same time.
And while this can work in small numbers, it not work if you extend to the whole society.
No, but who pay for them ?
Tax the rich ? Right. Let’s make an example: if we consider to tax the rich for 10.000.000.000 euros/year this means that every retired in Italy (about 23.000.000) get about 435 euro/year.
Even if the number of retirees whose pensions need to be supplemented were halved we just get a little less of 1000 euro/year. Too less to have any significance.
I think you should find the money some other ways.
I don’t see how we are approaching a similar scenario, if nothing else because we are not a pile of rubble again (hopefully).
Except production is no more here, so you cannot pay the worker more as there are no (well, less) workers.
For the first or second year, then the rich would have nothing more or, more probable, moved their money out of your reach and you will be left with nothing.
What? If the worker gets a fair share of the productivity gains, they have higher salaries. They can put more in their retirement fund and could work less.
See that graph:
Productivity gains vs. salaries. That is what was stolen since the mid-seventies. Salaries, on average, should be double as high. You could basically set aside one month of living per month (and earn interest on it). Where did the monetary gains go instead? Into assets of the wealthy, they just did not vanish under mysterious circumstances.
People just underestimate how hard they got robbed, if they even consider that they were robbed, that is.
Let’s make a better example. Why only 10 billion per year? Like, the private assets of German citizens are estimated around 5-6 trillion Euro. If we estimate like 6% interest (long-term gains on the financial market, evan higher the last few years, but granted, it’s hot), that is 320 billion capital gains alone, per year. Take a meager 10% and you have 32 billion already, or you could go harder, why not? After all people still earn money.
Take as an example the Quandt family: they “earn” 500 million cash(!) on BMW dividends alone, but pay less than 1% tax on those earnings. Why do I pay like 32% on average on my income from work, while they almost pay nothing for doing nothing?
Tax inheritance accordingly. People can inherit like 100 million and never have to think about anything in their life. Why should they inherit billions?
100 billion estimated losses through tax evasion estimated in Germany, each year.
If we do all that, and still cannot afford less work for everybody, OK, I am convinced then. But not before the rich get taxed properly.
I don’t know, have you looked around? Public infrastructure crumbles, people cannot afford basic necessities anymore. Funnily enough prime “Wirtschaftswunder” was in the sixeties, the rubble already gone.
Investments by the state are usually very locally sourced, as the state pays workers here, or invests in infrastructure. You buy flatscreens in China, allright, but you build streets, railways, bridges and public pools right here.
It’s not like there’s nothing you could do against that. Tax duties come with citizenship, like the U.S. does. Tax when people shift their assets away. A lot of assets cannot be shifted anyway. Look at the Schwartz or Abrecht families. Their assets are like thousands of supermarkets. Can they just pack them up and move them elsewhere? I doubt it.