Unemployment & GDP
I am very surprised Von der Leyen and the EU commissioners yet to act to bolster the EU economy for the less well-off countries, what are they doing, we all ask, what is Emmanuelle Macron, French President, and Olaf Scholz the German Chancellor not doing more to help the EU economy. Chinese unemployment dropped by 0.5% to 5.1% in 2021 whilst unemployment in the EU is at 7.6%
Unemployment and Gross Domestic Product by country 2021
All the above statistics were obtained from various statistical sources, and 2021 due to the Pandemic was not a representative year but gives an indication.
What these statistics tell us are:
1. China is a very low-wage economy
2. The cost of production due to massive investment in machinery and low wages results in a low cost per product, this also depends on the quality as well
3. This situation arose as the Western corporation were in pursuit of profit, mainly the clothing/footwear retailers
The EU and its member states really need to look at this and how to recover the business lost to China, the payroll costs are incidental, as the correct capital investment makes a difference and highly skilled operatives. The minimum wage of 10 euros per hour in the EU, which equated to Euros 20,800 per year plus the social security costs. However, with the right level of capital investment, this payroll cost could be much reduced.
The result of this would be to reduce unemployment in the EU as shown above, taking this further, the EU needs to attract the entrepreneurial type of people, whilst it is healthy to have small unemployment, having 7.6% is unhealthy and countries such as Greece, Spain, and Italy suffer badly as do their borrowing and the trading imbalance built up due to lower production and sales.
Germany is an excellent example of efficiency, for example, Faber Castle the colored pencil manufacturer, where one person operates 3 machines and ties and sweeps the floors around the machines, the effect of this is to save 4 jobs, this is 3 machine operators and a cleaner, if we take an average German salary for the 4 roles, we get an average of about Euros 25,000, this then equates to Euros 6,250 per person plus social security costs, this then approaches the average Chinese salary of $10,500 per year, the question then is if Germany can compete with the Chinese, why cannot the rest of the EU, the technology is here, so why are the CEO’s and the EU not welcoming this and compete directly with China, why are they so closed to this development, why not make Europe the great powerhouse it used to be, it is there to be taken by a few people with the view to the here and now and the future, the second question is the WHY NOT?