1) Mindset and Culture. The idea of entrepreneurship, hard work and reward for risk is becoming completely alien to Germans. New technologies and high growth sectors are almost exclusively perceived in terms of their risks and downsides. Security, reliance on the government for problem solving and tall poppy syndrome are paramount.
2) Overly complex civic systems. Germans always were famous for their bureaucracy. But government interference in the most minute details of running a business, endless red tape and micro regulations have made it largely impossible to be competitive on the international stage.
3) Poor Work Ethic. What? The Germans? Aren’t they known to be the hard working ones? Well - somehow, our trains are also known to be the punctual ones. These cliches might have been true during the “Wirtschaftswunder” - but today, Germans work the fewest hours of any OECD country.
4) Climate Focus. Germany’s government is focused on a largely ideologically driven understanding of climate change prevention. It’s not just that Russian gas is no longer available - in addition all nuclear power plants were shut off. Climate regulation and taxation also adds to rising energy prices and production costs.
5) Worker Rights: Germany has very high levels of worker protections, making it hard to scale workforces up and down and near impossible to dismiss employees for performance reasons.
6) High Taxes. Germany has some of the highest corporation and personal income taxes in the developed world. And while e.g. Scandinavian countries have even higher taxes, in Germany it doesn’t feel like you’re getting something of equal value back from the state. This is of course highly subjective.
7) Few Future Industries. Germany’s industry has focused on gas powered mobility and advanced machine building - and has become a world leader in many of these areas. It has, however, very few software, AI, or other companies that make up the bulk of e.g. the US economic growth.
There’s probably many more - but this might paint a picture from the inside.
German's pay a lot of taxes. Living costs and rent are sky high in cities. In the past, I reduced my hours to 28 hours a week because the difference was negligible in taxes paid. I even got money from the government to pay rent because my wage was lower.
There is a real problem where between salary band's, the money after taxes does not change significantly even if you're paid more. Working half a day only is incredibly popular for these reasons (among others). It's gone so far that politicans from all sides are publicly thinking about erasing the possibility for halftime work.
I met many engineers who would be completely willing to work more hours, but it makes very little sense as you are working the additional hours for far lower wages.
The idea of banning lower work times is new to me, but seems in line with the German government approach to invent an anti-solution to the problem with severe potential downsides (e.g. for parents).
"Far" lower wages? Progressive income tax is constant at 42% for essentially the whole salary range that is relevant for an engineer (66-278k).
As a concrete example, total tax burden at:
- 70k is ~40% (42k net)
- 100k with ~44% (56k net)
- 200k with ~46% (107k net)
I'd seriously question the judgement of any engineer that chooses e.g. the part time job that gives you 42k net over the full time job that gives you 56k net (= significant difference of possible living conditions/disposable income) _purely_ on the basis that you earn "far" less per additional Euro. (I think it would be very understandable to choose the less work hours just for having more free time to spend on other things.)
I feel like there is almost an inverse effect once you hit the limit on social contributions (~90k), where it becomes more motivating to earn more, as from that point "only" your income tax increases and health insurance etc. stays steady.
Of course not just because of that. They look at the money they earn, the money they need to live and see that if they reduce their expenses a bit, they can easily do with less hours. The 66k really is interesting, because starting wages are below that (my first job was 55k), but with experience you can easily get into that range. If that happens your income before taxes significantly increase, but your hourly compensation after taxes not as much and so you obviously have to ask yourself whether the additional hours are worth it or whether you can make do with less.
Additionally it makes employers where you generally work less hours (e.g. VW) more attractive. But obviously this has an effect on productivity per person.