Sehr ungeehrte GDL, (strong language warning)

And you know every firm's situation, huh? Perhaps citing a graffiti artist is not the best idea- even you will have to admit that wage moderation and Zeitarbeit aren't slavery.

And up through the 1980s he was correct. Having constant labour and capital with control very limited to an oligarchy and a handful of politicians kept the machine running for a couple centuries. But labour make too many demands, many of which are unrealistic. One hundred years ago things were different. Fifty years ago the mentality was still there but the economy was booming and the unions' demands could be met. Not so anymore.


But this is human beings being rational within their own microcosm. One thing that economists who don't study game theory always miss is that the definition of "rational" changes based on the situation. What's rational for a single man to do isn't necessarily rational if he has a family. What's rational for a single family to do isn't necessarily rational if they live in a community. And so on. Few people make decisions for the common good because from their own perspective it would be irrational, such as the unions accepting pay cuts for train workers (with the condition that management give up the same or greater percentage) in order to keep train prices down, the only prayer they have to compete against cheap airlines (which often make more money on the cargo they carry than on the €10/ticket planeload of passengers). It's a rational action for the long-term health and safety of the occupation but for the individual it's irrational in light of current and short-term future expected costs.

woof.

Zeitarbeit isn't slavery as we understand it in its purest definition.
But we ccertainly use the term more generally, also in English with the term "wage-slave".

Why do most people go to work? Becasue we HAVE to sell our labour.

I wouldn't expect a politically motivated graffer to write a long political thesis over a poster, the work "sklaverei" gets the message across even if not gramatically correct.

He surely speaks their language.


Reminds me of Europe is a big winner from globalisation. If only politicians would say so (Economist).

They're sympathetic with the strikers because they have a legitimate beef and I am happy to say that my union dues are helping them in their fight for higher wages and better working conditions. The OP has made the choice to be in the industry he is in as well. If he's so worried about his job moving to Romania or wherever, he should re-train.

I would be more impressed by your argument BD were it not for DB's 2006 financial report which says in real terms worker's wages had fallen by 34%, the board of management wages had risen by 65% and the supervisory board's had risen by over 300% since the early nineties. Personally that seems irrational to me.

The fact that a lot of this is about the impending privatisation of DB which you and everyone else will fund as taxpayers and users to line the pockets of private investors does not make much sense to me either.

Privatisation will also mean fewer lines, fewer trains, less regard for safety and off course even lower wages. I don't think anybody wins apart from those with vested interests.

It's more than just a matter of "grammar". I suppose you think that those who don't feel like working should be provided a swank life of leisure by those who do?

Slavery means forced labor without compensation, clearly nothing to do with Zeitarbeit.

topcat, Holger Lengfel is a sociologist. You say he is a Nobel Laureate, but in what area?

One slight comment I missed in BD's rant is that instability and insecurity of public transportation infrastructure also generates the positive feedback loop of strikes -> less reliable trains -> people buy more cars -> less ca$h in DBs pockets -> worse conditions -> strikes.

So basically, by playing this game they are setting their own barn ablaze.

Other than that, I loved it! You need to get a slogan and go live TV, something like fuck you should do the trick.

Why would there be "fewer lines, fewer trains, less regard for safety and of [sic] course even lower wages"? Explain.

I don't think that the likes of Mehdorn should swank about on his telephone number salary the money for which is generated by the staff of DB.

@Conquisador

Apologies I attributed the phrase to Reinhard Selten based on a conversation with a lecturer of economics from Frankfurt whilst discussing the same topic last year.

My opinion on what will happen to Db after privatisation is based on the UK experience and also the various models of privatisation that have been suggested by various political parties to make DB more attractive to investment. A lot of this I read last year so I will have to check if i can find some links.

Wages are primarily determined by the scarcity of labour which is why I can remember that garbage men in the 1970s in the DC area made 40% more than teachers. The price of unskilled labour is extremely inelastic because there are so many others who can and are willing fill the position, moreso than ever with the expanded EU. This inelasticity is both short- and long-term. There will always be unskilled labour, and where a shortage exists, the wages for that labour will rise until the positions are filled. Over the longer term the wages (in real terms) will fall again as the supply increases through various channels, primarily immigration. You won't dig a ditch for €4/hour? There are hundreds of Czechs who'll do it for €3. It's the nature of the beast.

Meanwhile, the skilled workers are in demand and are therefore able to command higher prices. Companies pay these prices because these workers bring at least that much more value. If I tend bar my labour is worth around €100/night. If a company wants me to build them a Citrix farm and internationalise their worldwide systems, I'm worth that whole night's labour every hour, and they're not even getting a full hour from me because I'm going to spend a portion of that time on Toytown. I'm easily worth €100/hour to a company which has a need to internationalise if the total benefit of the changes I implement bring even one single euro more of business in than they paid out to me (gross).

Welcome to Econ 101. Reality's a bitch.

woof.

As usual, MT, there are nothing but complaints from you, and no realistic solutions. Can you see why I support proft sharing for all employees?

Capitalism causing cancer? (according to a French textbook) Hilarious!

In terms of rail workers and international competition:
There has been the idea that rail workers should work more internationally. From an employers point of view, the idea might be to use say Czech drivers say to force down wages. But the pay differentials betwmeen Germany and Czech Rep etc. are decreasing and there's the issue for drivers of route knowledge. The fundamental conflict of interest between the train drivers and DB would remain.

In terms of the way forward for the rail industry, leaving aside a revolution of course.

The infratstructure should be split from the service provision.
It is right that the states, though that might need to be further localised, buy in local rail services to their specifications.
If and when there is greater competition on long distance services, there needs to be strong regulation of the prices, I suggest the federal government should set a maximum price per kilometre fare that must be avaibale on all trains on a turn up and go basis.

I guess your concern about Romanian mooks or being transported to the Philippines was just a rant then. GDL have handled this very badly and I mean by that the union leadership rather than the workers themselves. A single train driver with two years experience apparently earns about 1300€, not a great deal of dosh to live on in Munich for a forty one hour week (which correct me if I am wrong they still work).

Profit sharing as Con suggests is a worthwhile idea but on the BD blog the problem again arises about performance of individuals (although measuring performance costs as well). But for me personally there is something quite obscene about a German company recording profits of 8 billion euros as was reported a month or so ago.

There are issues with profit sharing, I'm not a 100% fan of it.
But anyway, a lof rail service provision is NOT profitable and profit shouldn't be the be all and end all anyway.

I am glad someone has mentioned the cash aspect as I was not sure of the stats-seriously I would not get out of bed for 1300 EUR a month which is a gross figure I assume, never mind work weekends and nights. It never ceases to amaze me the kind of sheeeeite money some of these people are paid. Fair enough, it never ceases to amaze me either how it is suddenly a big shock AFTER they join the profession. In any event I am not going to be as generous as some of the participants with someone else's wallet-if they feel they are not being adequatley renumerated then fair play for doing something about it.

p.s. I am not a union member and also have a relatively long commute each day and also work in an industry where if you don't deliver you are out on your ass

OK, MT, what don't you like about proft sharing?

topcat- one of the benefits of pay-for-performance for train drivers would be that you would be less likely to have them calling in sick and thus forcing other drivers to take their shift on short or no notice. You drive more trains, you get paid more. Also, DB is in a capital intensive business, let's not forget that. Can you link to their most recent annual report?

I doubt that any train driver in Germany is making only 1300 euros a month Brutto.

What, and leave Germany in the sorry state of shithole the UK has become as a result? Are you fuckin' crazy???

There was a report in the Abendzeitung when the GDL struck last time and there a train driver stated clearly his net take home pay was EUR 1400 on which he had to support his family in Munich.

What has happpened over the years is that there has been a great deal of pay restraint, particuarly when the economy wasn't good.
Real term wages have been falling.
But the cost of living has been increasing rapidly and now there IS money in the economy, there is a feeling it needs to be shared out more fairly.

Profit sharing has the down side of making it attracive for the employee to prioritise the company's profit which might be in conflict with the interests of the employees as a whole. Though I don't reject it 100% either.

A couple of questions- who will pay for maintaining the infrastructure? If I understand you correctly, you want the Länder to provide or pay for local train service?

Also, if there will be competition on intercity routes, why in the world do price ceilings need to be set by any government?

Here is the DB Annual Report 2006.

Happy reading

As far as I understand the latest position of the federal government and I agree with it, the infrastrucutre (track, stations, signalling etc) will remain 100% property of the federal governmwnt and they will maintain it as they do roads etc. I assume the funding will come from useage charges, possibly topped up from general taxation.

A totally unregulated fare structure on inter city journeys, even where there is a level of competition would push the fare strucutre towards a UK system.
Where there are some very low fares IF you can find them but that "turn up and go" fares are VERY expensive.
There would be interest from several companies to operate lucratice Hamburg-Berlin trains say and they might well offer lower prices.
But a maximum price per kilometre for ANY train hold prices down for those who don't travel on the most lucrative routes.

The Länder already purchase the local train services.
The system works relatively well.

I don't understand how motivating all employees to make the company as profitable as possible so that they can share part of that profit, i.e., make more money, is going to conflict with the interests of employees? Aren't firms run for some other reasons than this nebulous "interest of employees" whatever you deem that to be? Should the local, state, and federal governments be run for the interests of their employees? All private businesses? Do the employees provide all of the firm's capital, or any of it? Why then should firms be run in the interests of employees?

A more profitable firm will also find it easier to attract capital on favorable terms and thus make it easier to invest, expand service/product offerings where there really is demand for it, hire more employees where needed, etc.

Conq. You asked a question, you got the answer.
I don't want to turn this thread about the railways into a general platform (sic) for you to rant about supposed free market economics or me to give you a boring lecture on surplus value.

So taxpayers and rail customers will pay for the high capital costs of maintaining the infrastructure. Rail customers I can understand, but wouldn't it be better for private capital to fund the cap ex instead of already burdened taxpayers?


I still don't see why you insist on regulating "turn-up-and-go prices". What is so special about them?
Are the current fares regulated, and what exactly is the structure of the UK system?


Are these less lucrative routes now under price controls? Seems to me if you control prices, you also restrict supply on less lucrative routes, perhaps even causing them to be discontinued in some circumstances, after all why run lots of unprofitable, even money-losing trains (or was that your idea of "running a company for the benefit of its employees)? Do you think you or some government official knows better than a rail service provider what should be charged, i.e., what people are willing to pay? Just which routes did you have in mind for price controls?

Just how does that work, MT?

The notion of maintaining the infrastructure is the public hands is that it is public infrastructure of a common benefit.
Privatisation of the infrastructure as a separate company in the UK was a complete disaster so it was re-nationalised.
Privatisation of the infrastructure along with service provision as DB would like would hinder competition.

Currently German Länder specify what level of service they want on a particular line over a certain period of time and companies bid for the contract.

The reason I think turn up and go fares should be regulated ie a MAXIMUM level set is to ensure acess to mobility for everyone.
I would imagine the regulated maximum fare would be set at roughly the standard DB tarif and then move over time.

about what I got when I started work in Munich at a relatively high tech firm

People shouldn't expect in the 21st century to be able to support a family on one salary - and by supporting that strategy you're effectively championing division of roles between the sexes and "keeping women chained to the kitchen sink"

I generally like the 'german system' though. But the increases they are asking for now are pretty silly, even if there was previously wage restraint

I certainly don't expect women to stay chained to the kitchen sink.
It is worth noting that in many cases women HAVE to go out to work as the family needs the income.
And of course then we need Kindergartens etc with good staff who want a decent salary...errrrrrm.

The political statements made by BadDoggie are dubious. It is a constitutional right of workers to strike. I am not in a union myself, nor do I work for the Bahn. But I fully support their right to strike. And what is more, the law supports it.

The German economical system is not all-out capitalism. There are some moderating elements. The right to form trade unions and strike is one of them.

It has become fashionable to critizise trade unions. This is a development which is definitely fanned by an alliance between the media and the industry. But looking back in history, the alternative to having trade unions - i.e. having no trade unions - did not work and led to massive abuse of workers.

So, BadDoggie should read the German law and live with it rather than insulting people who legally fight for their rights.

Alternatively, BadDoggie (if he/she is a German citizen) could try to become politically active and work towards curtailing the right to strike. I am sure he will have a lot of support from managers.

Well, the management got a 60% hike.

indeed. Seems reasonable


definitely

It would also benefit from private capital, especially with the constant struggles government has in paying pensions, just to give one example. Just imagine how much the government could get for selling the infrastructure as well as not having the annual cost of maintaining it.


That doesn't mean the same would happen here. I'll bet there were at least some things done in the UL privatization that either were unique or wouldn't be repeated here. One can always learn from others' mistakes.


You don't think that the terms of the privatization can state that completely open access is required? As if the government isn't vulnerable to pressure from a privatized firm (cough, Deutsche Post high minimum wage for mail carriers that crowded out other competitors)


Is there a high level of demand for the service from customers at the level the Länder are currently specifiying?


Everyone has access now. Why do you need to regulate prices (with all of the attendant negative effects) to do that? The problem is, such a system will always create an increase demand in quantity at the lower price, and thus reduce access for those who came after all seats were sold out. What happens right before a holiday? Are you going to require a service provider to keep a certain percentage of seats unsold until a certain time? Talk about creating scarcities! This is a crazy idea.

I would imagine the regulated maximum fare would be set at roughly the standard DB tarif and then move over time.

Staying on the topic - an agreement was reached between GDL and DB management last year. What is the reason for the fresh strikes?

Rail companies could offer special pre book deals, lower fares generally, do a fire sales of loss leader seats for 1 Euro etc.
But if the maximum fare levels are unregulated the companies will gouge.
And fare also have to be kept reasonable for those who don't want to travel on the sexy routes.

As far as I can see in Bavaria, the state is buying in good services, fairly much in line with what customers want and are prepared to pay for.

DB want the pay deal linked with an agreement that the union GDL will in future negotiate along side the 2 other rail unions.
GDL want to retain the right to negotiate seperately on their own.

This is becasue they regard Transnet as is it is now led as a patsy union and/or they HAVE to retain their independence to have any significance.

Sounds good for consumers, but that isn't the effect you are worried about. Why would they do this, and on which routes?


You know this, how? If the demand patterns are known to the Länder, surely they are to DB. Are you sure there is no excess capacity, or worse, a lack of capacity being purchased by the 16 Länder? Are you telling me that all of them get it right all of the time?

How do you what a reasonable rate is? Why are you demanding an inordinate amount of resources be out into routes that the customers have less of a demand for, and then demanding that less revenue be garnered from these routes simply because you want some people to pay less than others?

Sorry, you cannot protect people in Germany from every little thing you deem sub-optimal. The price mechanism allows people to make the proper decisions with regard to resource allocation. Your fiat decisions would badly interfere with the price mechanism and cause distortions that would negatively impact entire companies. Do you think a firm will invest more in a route which has price controls or one that doesn't? What do you think the resultant effects will be on competition, quality of service, and supply of train service? It's also hard to pay employees more when revenue is lower, especially when it is limited by government fiat.

It's really simple.

A handful of sensible reforms went through before the whole place decided to lurch back toward crypto-communism. The results of that were a modest but nonetheless spurt of economic growth. Now, everyone wants their "fair" (which in Germany translates as "confiscatory") "piece of the pie".

Have any of these people asked themselves to what degree they (as public employees) had anything whatsoever to do with the modest economic expansion? Forgive me for asking, is it conceivable that they were all overpaid to begin with, and the free market has now adjusted to properly price a more realistic value for sitting in a little compartment pulling a lever back and forth when it comes time to let people on and off the train?

A Reaganesque sacking is in order ... if only any of these job-for-life-regardless-of-merit-and-or-actually-winning-an-election "politicians" in the Bananenrepublik Deutschland Politbureau had a spine.

I like your train of thought.

If something is left entirely to market forces then unprofitable services would go.
Sometimes there's a role for the market, sometimes there isn't.

Expaticus, you could sack the entire workforce tomorrow.
When they were finally all replaced, EXACTLY the same situation would arise.

When you buy and sell something the demand and supply never match 100%
If you have one litre of milk in the store at 2001 that is over supply but if you have zero at 1959 that is under supply.

The trick is to match supply and demand of public transport as closely as possible and that works fairly well as far as I can see as a passenger in Germany.
Though of course there are political decisions that are made not based on pure market conditions.

So let's give the phone system back to the post office and go back to their traditional tariff structure! </sarcasm>

When the commies determined a certain rail link couldn't be run "profitably', a public/private partnership showed that it could be done. "KEIN STREIK BEI VIAS"

MT, if all but a few (or none at all) people do not want something, why should everyone be forced to subsidize it? No political decision with regards to rail sevice can match supply and demand for that service; it can, however, distort that supply and demand.

Yes, because as we've seen in the UK, that model works just splendidly.

And just how do they determine that fare? And how does it change in relation to fare changes in other transport modes? We used to have government airfare regulation and that system was so peachy I don't understand why we did away with it.

No, it's a very real concern which is why I have to do my best to stay on top, keep learning, and be more productive than they are. Most software companies are not hiring in Western, industrialised lands anymore. They're only hiring in "Profitable Centers": Romania, India, Malaysia. And as demand goes up there so do the prices, and without the expandable infrastructure every one of these countries is experiencing economic woes that would take me a week to write up justly, with massive inflation and severe affordable housing shortages at the top of the list.

Not when the public paying for it has no direct access to that infrastructure.

Great, and when that maximum level is below the break-even point, what then? Government subsidies?

It's not their right to strike; it's how they do it, with "Warnstreiks" laying the country lame for days rather than just going full-on. They do this to maximise the effects and cause as many problems as possible because once they go on a "real" strike, the government can step in and force an agreement to protect the entire country.

woof.

Competitng haulage firms can drive on one set of roads and sperating the rail service fom the rail infrastructure aims to allow that to happen with trains.

If a rail service or a school or a post office or whatever is not profitable, then a decision has to be made whether to subsidise it or close it.

Right now the USA is seeing a massive expansion of urban rail transport.
And that is due to public investment. Way to go USA.

Let's not even broach the subject of how all of us involuntarily had our utility bills jacked up EUR40/year to subsidize putting super-expensive solar panels on roofs in the Land that The Sun Forgot all in the name of "doing the right thing".

Regressive Taxation R Us!

And I thought our fuel bills were jacked up by the cabal of energy companies.

You are right though Ex. We pay more to enable solar panels to get subsidised, we pay more to extract maximum use from refuse burning,
we pay more to invest in centralised heating systems. There are political decisions that exist outside of the mrket and outside of the short term.
I mean, the oil will last forever right?