Euro on the brink of collapse

[Agelastus]

I am not sure what you are trying to demonstrate with these numbers.  The issue is not that Spain should get the same number of new people as Florida, it is that it should attract sufficient additional labor that labor costs do not rise.  If 15% was sufficient to prevent this in Florida but was insufficient to prevent this in Spain , then the conclusion we should reach is that 15% was insufficient for Spain, not that Florida's percentage is good enough for Spain so we need to look elsewhere for the problem.

Which is why I said I needed to have a look for the GDP figures for the two countries. Which I haven't done yet.

What the raw figures do show though is that the level of labour mobility superficially appears to be roughly the same in the two cases. Whereas many people here are arguing that labour mobility is much less in Europe than America.

Actually, I suspect that labour mobility is actually comparable between Europe and America. What is not comparable is family mobility, in that a higher percentage of Europe's workers move to another country for a year or two to work while leaving their families behind in the mother/fatherland.

You will never have perfect labor mobility, of course, because of the marginal costs of actually moving, but the better one's economy's labor mobility, the fewer the localized inflation issues like those being discussed here.  The solution isn't to do as well as some arbitrary other party (like Florida), but rather to do well enough to avoid the problem.

I suspect, as I implied above, that the major issue between the two regions is the lower average skill set of a large number of the migrants to Spain. That would put an extra inflationary pressure on wages in Spain compared to Florida as their would be fewer candidates for the skilled jobs and this would not be shown in the raw figures.

[grumbler]

Particularly at fault is a certain Wall Street bank whose first name beguins with a G and the second one with a S, and is beloved by certain Languish posters, which hid billions of greek government debt so they could join the Eurozone.

I haven't really noticed; which certain Languish posters love Goldman Sachs?

[Martim Silva]

A quick (and rough) internet search indicates that as of 2007, approximately 15% of Florida's population were migrants who had moved into the state after the year 2000 (although I don't have a split of that figure between migration between US States and overseas immigration.)

Note that Spain is not a good indication; a good chunk of its immigrants come from South America - who already speak Spanish, if not the Castillian type - and other chunk are retirees from the UK and Germany, who don't care about the language anyway. There is also a good number of Portuguese, who can understand the language quite well.

Also, about the language one should note that we portuguese are famous for immigrating to Britain and Germany without speaking the local language.

(One study I recall noted that portuguese immigrants living in the UK could easily move to whatever city their new job required and had the usually required car and driver's licence, but felt discriminated because the simple fact that they could not speak one word of English)

I haven't really noticed; which certain Languish posters love Goldman Sachs?

When I posted stuff critical of GS' activities well over one year ago, I was insta-labelled an "anti-semite" by several posters for doing so. I don't remember who they were - it wasn't you, that I know.

[Josquius]

I was thinking that on Spain too, but then I don't think Florida is such a premium example either- lots of Cubans and retirees.

[Agelastus]

(One study I recall noted that portuguese immigrants living in the UK could easily move to whatever city their new job required and had the usually required car and driver's licence, but felt discriminated because the simple fact that they could not speak one word of English)

No, they are discriminated against because half of them are actually Brazilian, who firms get fined for employing.

[The above from personal experience.]

[grumbler]

What the raw figures do show though is that the level of labour mobility superficially appears to be roughly the same in the two cases. Whereas many people here are arguing that labour mobility is much less in Europe than America.

Tyhe numbers only show comparability of results between Florida and Spain; they say nothing whatsoever about actual labor mobility in the US or Europe.

What does say something about labor mobility is whether labor shortages have caused inflation in specific areas of the US or Europe, but not in others (or the reverse, the deflation of wages due to localized labor surpluses).  You saw a bit of this in California and you see a bit more of it in New York City, but in neither case did it lead to the kinds of economic crises that Greece is suffering and Spain is possibly facing.

If Europe does, indeed, have a high degree of labor mobility (and I certainly am not arguing that it does not), then the problems Spain and Greece (and some others) are  suffering are not from wage inflation at all.  Right?

I suspect, as I implied above, that the major issue between the two regions is the lower average skill set of a large number of the migrants to Spain. That would put an extra inflationary pressure on wages in Spain compared to Florida as their would be fewer candidates for the skilled jobs and this would not be shown in the raw figures.

I am not sure what this has to do with anything.  If Europe has the same labor mobility as the US, the people that move to Spain go there because they get jobs there doing the work that is offered.  Florists are not going to Florida to get jobs as heavy equipment operators.  The wole point of labor mobility is that there isn't extra inflationary pressures on wages, because as soon as wages increase a bit, more people move to the area to take advantage, and the extra labor decreases inflationary pressures.  If this is not what is happening in Spain, then your argument that Europe ahs the same labor mobility as the US collapses.

[grumbler]

When I posted stuff critical of GS' activities well over one year ago, I was insta-labelled an "anti-semite" by several posters for doing so. I don't remember who they were - it wasn't you, that I know.

It sounded like made-up bullshit when you said it, and sounds even more like made-up bullshit when you try to defend saying it.  My suggestion is:  don't try to fly that kind of bullshit here.  You may not lose any credibility (because even if you sacrificed all the credibility you had, you would lose no credibility at all), but you do sacrifice good will.

[Iormlund]

There is a problem with that article. While a good part of the money was foreign and a good part of construction took place at the coastline, the real problem right now is that, encouraged by low interest rates, millions of people got up to 45-year mortgages on flats that will never be worth the same price again, all over Spain. As a 30+ year old without a mortgage, not to mention a regular job, a good salary and significant savings, I'm quite a rare sight.

Also, with the exception of a few Portuguese all labor attracted to Spain was naturally from without the EU, simply because Spain had very low wages to begin with (now even lower thanks to inflation and housing bubble).

[Agelastus]

I am not sure what this has to do with anything.  If Europe has the same labor mobility as the US, the people that move to Spain go there because they get jobs there doing the work that is offered.  Florists are not going to Florida to get jobs as heavy equipment operators.  The wole point of labor mobility is that there isn't extra inflationary pressures on wages, because as soon as wages increase a bit, more people move to the area to take advantage, and the extra labor decreases inflationary pressures.  If this is not what is happening in Spain, then your argument that Europe ahs the same labor mobility as the US collapses.

There are two points involving labour mobility. Higher wages in one area compared to another OR a lack of jobs in one area compared to another.

Admittedly, the higher wages part is what is driving labour mobility in Europe, but it is all from east to west. I doubt the USA has the same wage differentials as Eastern and Western Europe does. The pay in western Europe is a lot higher for unskilled jobs as well as for skilled jobs than it is in the east. Therefore you get a large migration of unskilled labourers looking for work as well as skilled labourers.

I am fairly sure that the unskilled only move en-masse in the USA when jobs in their home region dry up, but I may be wrong about this.

[MadImmortalMan]

Particularly at fault is a certain Wall Street bank whose first name beguins with a G and the second one with a S, and is beloved by certain Languish posters, which hid billions of greek government debt so they could join the Eurozone.

I haven't really noticed; which certain Languish posters love Goldman Sachs?

He probably means teh Jews. 

[Razgovory]

When I posted stuff critical of GS' activities well over one year ago, I was insta-labelled an "anti-semite" by several posters for doing so. I don't remember who they were - it wasn't you, that I know.

It sounded like made-up bullshit when you said it, and sounds even more like made-up bullshit when you try to defend saying it.  My suggestion is:  don't try to fly that kind of bullshit here.  You may not lose any credibility (because even if you sacrificed all the credibility you had, you would lose no credibility at all), but you do sacrifice good will.

I don't even remember what it was.  Euro craziness is so off the charts I don't always register it.  I hold my fellow American (and Canadians and Brits) to a much higher standards.

[jimmy olsen]

There is a problem with that article. While a good part of the money was foreign and a good part of construction took place at the coastline, the real problem right now is that, encouraged by low interest rates, millions of people got up to 45-year mortgages on flats that will never be worth the same price again, all over Spain. As a 30+ year old without a mortgage, not to mention a regular job, a good salary and significant savings, I'm quite a rare sight.

45 years?

[grumbler]

There are two points involving labour mobility. Higher wages in one area compared to another OR a lack of jobs in one area compared to another.

Admittedly, the higher wages part is what is driving labour mobility in Europe, but it is all from east to west. I doubt the USA has the same wage differentials as Eastern and Western Europe does. The pay in western Europe is a lot higher for unskilled jobs as well as for skilled jobs than it is in the east. Therefore you get a large migration of unskilled labourers looking for work as well as skilled labourers.

I am fairly sure that the unskilled only move en-masse in the USA when jobs in their home region dry up, but I may be wrong about this.

I understand what you are saying, but don't think that labor mobility is necessarily tied to either "skilled" or "unskilled" jobs.  It just happens or it doesn't.  If Europe has high mobility for skilled workers, then Spain would have attracted the skilled workers and the inflationary pressures would not exist.  If the migration in Europe is only in unskilled work, then Europe doesn't have the same labor mobility as the US.

In the US, unskilled workers tend to move less because (1) unskilled workers are more likely to take an unskilled job in a completely different field than a skilled worker will, and (2) a move to areas where unskilled labor is paid more also tends to be a move to an area with a higher cost of living, so the move is often not a net gain in standard of living.

[sbr]

There is a problem with that article. While a good part of the money was foreign and a good part of construction took place at the coastline, the real problem right now is that, encouraged by low interest rates, millions of people got up to 45-year mortgages on flats that will never be worth the same price again, all over Spain. As a 30+ year old without a mortgage, not to mention a regular job, a good salary and significant savings, I'm quite a rare sight.

45 years?

My loan just got refinanced out to a 45 year loan.  Like I am going to live that long.  Suckers. 

[Neil]

When I posted stuff critical of GS' activities well over one year ago, I was insta-labelled an "anti-semite" by several posters for doing so. I don't remember who they were - it wasn't you, that I know.

You've been labeled an antisemite because of your long-standing hatred for Jews, not your long-standing hatred for capitalism and progress.