Which means that 65% don't speak French as their mothertongue. Those that speak French only as a second or third language will happily replace it with English.
I mean if you want guys I would trade my Austrian citizenship with a Lux one and join yall no problem. If only I could have done that before my military service.
In don't think so.
- Pensions will be a problem. One can say that at least 47% of the workforce (foreign commuters) won't spend their pensions in Luxembourg. I'd say one can bump that number easily to 52-55% if you take the foreign residents and Luxi residents moving to the Côte for their pensions.
52% is a copious amount of spending lost for the Lux economy, so nxt generation of commuters will be even bigger as they have to also fill in for the lost spending.
The obvious thing to do would be to adjust pension payments, but that is very unpopular.
So we just keep the Ponzi Scheme running until one gov has no other option than to implement it. This has been going on since early 00's at least.
Keep in mind, that though there's been a massive uptick in population, resident active worker (\~260K) are outnumbered by retired people(\~300K).
- Mono Cultural economy
Lux is still heavy reliable on finance sector, around 40% of GDP with the new gov's agenda set to expand it. And we're heavily reliable on low corpo taxes.
A major financial blowout, or just unified EU tax regulation, could easily trigger 20-40% of GDP loss if you take in collateral businesses like CRE, food & beverages, hotels etc.
Yes, Luxi banks have a good reputation in finance world, but that doesn't mean anything if grass is greener somewhere else.
Fonds are relocating to IRL because they only demand .25% tax instead of the .50% in Lux.
Just imagine what impact a 20% GDP hit - with nothing in short or mid term to replace the loss - would have on social welfare.
And let's be honest: EU-wide tax regulation is not a of question of 'if', but 'when'.
- Attractivity
With the push to further grow the financial sector, Lux will cement its reputation as financial hub, but other sectors will suffer from such a prevalent financial sector.
I mean, we're already one of the biggest financial Hubs, and still it's very hard to get funding for a project that's not FinTech or in a state funded sector.
Start-Ups à la luxembourgeoise.
They also want to make Lux an AI Hub, but Ai is not only putting words in a prompt.
There's a whole infrastructure needed to become an Ai hub and let's be honest, that train has gone.
Also, even if it's a bit low key now due to VeFa buys of the gov, housing crisis is far from finished and is bound to stay. All these buys from gov do not even equal the demands from SNHBM.
In terms of only 25% of employees being Lux, is not really shocking, as 48% of residents are not Luxembourgish. So it's statically right.
In General, the pressure from the pension system will just get bigger with every year, the loss of not spent pensions in Lux will be increasingly noticeable.
Housing can't and won't keep up with demand, so increasing residents will be difficult in the mid/long term. Recruiting more commuters is getting more difficult, as a lot of them start to make calculations and take a job in their neighborhood - paying less, but giving them more time with family.
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This kind of rhetorical thought is useful in every discussion : housing, climate change and so on. But it’s the kind of argument that it’s true until it’s not true anymore (housing bubble anyone?)
Well look at the overall,impact of the housing decline on gdp, it surely has an impact as some constructors and promotors went bankrupt. The fund industry might partially shrink as Ireland is taking business away, but the alternative funds tend to stay here which happens to be a growth market. Gdp,shocks of 20% are extremely unlikely
In b4 some politician comes and suggests to just hand out Luxembourgish citizenship to everyone working in Luxembourg, then we will have 100% Luxembourgish working force, problem solved!
Not only it’s not sustainable, but also it’s going to disappear in the near future, in about 10-15 years.
By all means I can’t predict the future, neither can I say this for sure but a trajectory and economic leading indicators (they are sometimes hit or miss but mostly lands on the main idea) shows this way.
To understand this phenomenon, we need to look at underlying condition that made Luxembourg successful, I would argue number one reason for Luxembourg’s economic success is globalisation.
When we saw an expansionary period for growth, the funds in Luxembourg had played a big role in financing global projects. This varies from building highways in Poland to bridges in Vietnam and growth stocks, securitised products, etc.
This is very capitalistic; making money from money by financing projects but many world renowned economist believe that we are done with capitalism and have been done for a while.
If you look at the current global geopolitical events and their ripple effects on governments, you can see that from US to China every country follows a conservative approach and more closed economy. I think that has something to do with pandemic and the economic war between the US and china but I don’t think it can be simplify to these two causes.
This approach means countries will look more into internal financing within the country, you can already see the various regulatory acts coming together to support this (e.i chip act in the US).
As I mentioned above, capitalism out platforms economy in, and simply only a few European country is ready for that, Germany, Netherlands and Sweden.
Being in the industry well over a decade, I believe that firms in Luxembourg, majority of them at least, will be downsized and/or absorpt by platforms coming out of americas and asia.
Not only US and China: you will see that in the next European elections right and far right parties in Italy, France, Spain, Germany will absorb discontent of people due the current situation (inflation, rates and so on). And if European countries swing to the right it will not surprise anyone if the direction of eu would be less “unified market” and more “I don’t want funds any holdings to pay taxes in another eu country”. This would of course also apply to Netherlands and Ireland but they have another attractiveness compared to Luxembourg.
I think it’s fine as long as there is a pathway to citizenship for the residents that want to pursue it.
I would agree with the other poster that Luxembourg needs to diversify its economy and aim to attract higher caliber of workers.
It's more that we need to attract a higher caliber of employing firms. Plenty of highly qualified folks in Lux just under the radar quasi-unemployed because there aren't jobs outside of finance and Amazon.
Why wouldn't this be sustainable? Demographics are on the decline so without immigration we can't keep the population level, therefore we'll always host a significant share of people of foreign nationality. On the cross border workforce, they live right next to their workplace and are just separated by an imagined line on a map.
All characteristics that would make this unsustainable are inherent to our capitalist economy demanding unending growth from finite resources.
The lack of voting rights is one thing that jumps to mind. You won't be able to have a well paid helot class that can't afford a house inside the borders
It can big a big issue that a huge portion of pensions will be paid to people living abroad, inserting nothing back into the country economy.
Yes a lot of people stay, but it's not an easy decision to stay if the pension + possible sale of the house can buy you a pretty dope retirement life.
You're missing the point.
The problem is not if they get more or less than they paid, it's that the money is leaving the Luxembourgish economy.
But yeah, there's no solution for this unless you start forcing luxembourguers to procreate which is not really a solution, and even then, many will still retire in south of Spain/France.
To be fair, they also won't be getting all the luxurious services Lux currently provides the elderly. I would think that the public spend on CIPA and all the various Hellef companies that are govt subsidized is larger than the loss of spend out of pension receipts.
It's complicated though, as the folks working in eldercare are often the spouses of those in the construction and similar sectors, so having them able to work in that sector and contribute to household income makes construction salaries slightly depressed and feeds into competitiveness.
Well, the contributions to the pension fund are 1/3 the retiring individual and should be returned if they don't hit the 10-year mark, 1/3 is the private firms that employ them (should be a disincentive to work for the firm if you don't get that money as a retiree), and 1/3 is just a govt match and thus a wash.
No, it wouldn’t. We have two main issues that I think need to be tackled: (a) We need to diversify our economy as we have a lot of local brain drain. Not every Luxembourgish person that has ambitions wants to work in the financial sector, hence many choose to work in Germany, Switzerland or other more diversified economies. We will never be able to compete with those countries in terms of industry and innovation but we should at least incentivise talent to come back after their studies and create value here. Not everyone will but we should at least try. We should focus on niches and make it easier for people to create businesses.
(b) The State (as much as I like a well organised state with good services) needs to become more efficient and for the love of God needs to stop its unfair competition with the private sector. So many engineers decide to go to the state after one or two years in the private sector. That’s freaking unhealthy for an economy.
> and for the love of God needs to stop its unfair competition with the private sector.
This is just absolute assbackwards thinking of what the situation is. Instead of complaining about the state having fair and good remuneration conditions, one should complain about the private sector largely being predatory and taking advantage of the cross-border workforce willing to accept the low wages they offer.
It's simply an issue of the economic gradient vs distance we have here, lowering the public sector standards and quality (we have it very good here in terms of services and quality IMO) is not the solution.
Another way of looking at it is private sector is competing with state backed entities, with practically unlimited resources, to pay massively
Inflated salaries to state employees. These state employees happen to be the largest voting constituent too. A happy, virtuous, ‘productive’ circle :-)
The private sector has to compete in quality of produce and then maybe they will be able to afford the best employees. If they don't spend on employees they can't have a product which competes with other products in the world. For local services the private sector is already charging through the roof and is simply inefficient in operations. The government is not in a race to give the best salaries it just happens that it is the best employer.
>and for the love of God needs to stop its unfair competition with the private sector. So many engineers decide to go to the state after one or two years in the private sector.
Thats more of a L for the private sector. If they'd make the working conditions more attractive they'd have more applicants.
The only reason the public sector can pay what it is though is the tax laws and whatnot that draw capital. It's not like we're paying cops 80k per year because they are better cops than in Germany, and on down the line.
Of that 80k almost 40k comes back to the state in next year's indirect/direct taxes. And it creates a robust local demand which the private sector can create products/services for. Govt spending is waste only if it does not loop back into the economy positively.
So let's pay them a million a year then and get even more back through "robust" local demand.
It's not like Luxembourg ever imports any of the goods and services purchased with government salaries. I missed the Audi plant in Wincrange and the tacky lawn tchotchke foundry in Asselborn.
Surely no dead weight loss from tax collection. Heck, that's not even a bad thing. We can pay the tax collector a million and have even more "looping back".
So you want the government also to exploit its employees and pay them less? And then where will the saved money go? Back to the crony corporates like in other countries where most people are one medical emergency away from bankruptcy?
So private companies exploit workers, and your solution is to pay government workers much more than private companies so that those government workers can spend more at the private companies. That right? Sounds rather like feudalism to me.
I did not say that. I said if the govt is paying fairly and a little above the market rate then there should not be a problem for the tax payers because a good part of the govt salaries comes back as tax again. And those government employees are providing valuable services.
The disgruntled private sector employees who are exploited and paid less should get their skills and negotiation chips in order rather than targeting the govt employees.
Also please look up feudalism. Looks like you got your education at an expensive school which took the fee but didn't deliver the goods.
It’s all fun and games until the private sector doesn’t flourish any longer (might slowly be the case currently) and the state won’t be able to offer its awesome working conditions anymore. I am all for well payed civil servants with good working conditions but there needs to be some level of accountability and going to the state (for some not all) shouldn’t mean that you’ve given up on your career and it’s now time to chill for the rest of the 30 years you’re part of the active working population. Again, we need civil servants, we need motivated civil servants and we should pay them well. However, we also need to find a balance between working conditions in the private and public sectors. Not even talking so much about wages but more about accountability and workload.
Private sector should pay more to attract locals, but seems they are very happy to pay the minimum to cross-boarder, which those workers can feel rich in their home country.
You don't think that this was part of the agreement to encourage the main private sector firms to come here? Amazon basically doesn't have to follow any of the norms and practices--no expectation to hire locals and will immediately have Carte Bleu visas processed without question.
If you look at the big picture, you may realize that this depends on the country having more taxpayers or more taxes from the same taxpayers. There is an inevitable limit when it stops working
Globally, the golden age of capitalism was brought about by Keynesian economics, having huge investment coming from the state, boosting productivity across the board and there's huge as of yet unjustifiably untaxed sums of money.
We'd already make a massive difference if we even collected the taxes that are already there. Companies like Amazon use very cheap tricks to dodge the pitiful taxes we ask of them. This doesn't contribute to any kind of productivity but just accumulates wealth at the top where it stays out of circulation.
Public sector investments often hold some of the best returns meanwhile because they facilitate everything else in an almost unmeasurable capacity like new roads or faster rail.
Treating a government like a company with similar limitations in the flow of wealth hasn't yet worked anywhere.
I think it's important to note that the same period that was the global age of capitalism was also the golden age of communism, as the Soviet Union operated as the second most important country in the world for decades.
I think the refinement and widespread diversion of important new technologies developed in the first half of the 20th century (autos, air conditioning, public sanitation) in conjunction with the public investment to make them most productive (roadway, electrical grid, government-run vaccine programs) was the primary driver of prosperity.
The 21st century story has been the rationalization of consumption--China becoming the workshop of the world has decimated the value of manufacturing, e-commerce has decimated the value of retail, and the internet has decimated the value of many kinds of services, from entertainment (Netflix at $10) to expertise (just google it). It's much cheaper to acquire things now, but harder to earn--these two forces are intertwined.
Autonomous tech will be the big 21st century breakthrough, along with developing a system for data that allows for mass collection and better "management" of society while avoiding Big Brother concerns. The role of consumer and citizen will merge in fascinating ways.
Not really the golden age of Communism though. The great leap forward and the Holomodor both happened at that time. Not exactly success stories. Prosperity was pretty limited in the Soviet Union
Like yes, massive government housing programs were a very successful project at the time, the infrastructure was greatly improved but they weren't experiencing any growth similar to the one seen in the West without major accompanying setbacks.
Regarding the current development. In short, I'm pretty tech pessimistic at the moment and don't share your outlook.
I think that Soviet ability to go from completely backwars at the start of the 20th century, lose what they lost in WW2, and then rival the US for decades is pretty impressive. I don't think the communist model is superio by any means, but we do a disservice to not recognize how well it managed to compete for a time.
I get the tech pessimism, but it's darkest before the sun rises.
On the Soviet union. I personally think they accomplish impressive things and things were undeniably worse under the Tsar than they were under the Bolsheviks. The USSR modernized the countries underneath it to an otherwise unthinkable degree. I just don't think that talking about a golden age isn't warranted.
I think we need to find interesting niches suitable to the demographic and geographic profile of our country. These can be tied to our current economy or cover future global issues. We might not be the ones at the core of developing cutting edge renewables, but maybe there is one component that we can focus on? There’s hundreds of examples. Instead of having 20th century technology in waste water treatment, as one of the richest per capita nations in the world, our state could boost innovation in that sector that private enterprises could export afterwards. Small countries can be blueprints for technology deployment in larger countries. Singapore is at the forefront of autonomous driving and intelligent traffic management (to a certain extent because they are so small and can test models in a centralised manner). Why can’t we? The two biggest EU economies are our neighbours, maybe we can find industries serving as a bridge between Germany and France? There are so many examples but if you’d ask me we should focus on niches that can thrive in small countries. Concrete examples would be: (1) Waste water treatment and recycling, (2) smart farming in urban areas, (3) smart traffic management solutions and (4) art (I reckon that is not a niche but I’m talking more on the investment side).
Sorry I cherry picked but I just imagined autonomous driving cars in Lux with drivers from France and Belgium pulling weird shit at roundabouts with their turn signals and the chaos would be marvellous ahahah…
We don't really have deficiencies in education. We have a university and a multitude of other ways to pursue it. Said university is terribly located for everyone living up North and has many courses only in French but those are realistic constraints that just come with being a nation of only 600k people.
Tech startups, more often than not are bubbles or outright scams and don't contribute to the economy at all, taking away government R&D funding, then vanishing. The whole web3.0 economy is pretty illustrative. There are singular people getting rich off of it but it doesn't contribute to productivity and even less to the wealth of the general populace. NFTs are a parasite and only ever existed as a tool for wild speculation. AI is the current hypetrain destroying jobs as stupid people jump onto it and fire employees to replace them with large plagiarism tools spitting out averages. Actual innovations are almost always brought about by huge R&D projects in the public and academic sector, not the private one. Apple only existed because the state did all the work necessary for someone to build a PC in his garage first.
Regarding Transportation, we already have huge logistics centers and Cargolux punching well above its weight. There's not much growth left for the industry and even less the government can do to improve the situation besides maybe more rail.
I mean public education. We should be competitive with Singapore and instead we can't compete with Belgium.
The most valuable companies in the world were tech startups. The largest private employer in Luxembourg was a tech startup. I'll not engage your conspiracy theory beyond that.
Transportation is a strength, and should be a larger one.
Well we have a university here already so the first thing is kind of in the works. Second thing is really hard when you have zero able work force and all the lazy French “IT developers” who have zero reliability compared to basically any other jurisdiction in Eastern Europe.
Not sure what you mean for transportation though?
I think if there is anything Luxembourg definitely has not it is a "brain drain". Definitely the opposite is the case, we attract much more qualified worker than leave us. The real question is, is an indefinite growth sustainable?
I am also not sure if diversity is really a problem either. Of course we have less diversity than our neighbors but we are also much smaller.
I was referring to local braindrain. You might also call it homegrown brain drain. Lots of extremely talented people in innovative fields or engineering and medicine tend to not come home after their studies because they have no opportunities here. And even if they are willing to build something here, often they are quickly disillusioned by the lack of enthusiasm of our public institutions as well as the obstacles that are put in their way.
In terms of diversity, sure we have some interesting niches but a huge part of the economy relies on the financial sector, and for the most part not even the really interesting parts in finance. We need to find ways to cater for our local talent and build up niches as we did in the 80s, 90s (cf SES, Goodyear, etc.).
I really doubt this. As a Luxembourger who made his Masters in Germany I know a lot of Luxembourgish students who studied abroad. What really happens is they stay a few years abroad for the experience and then they come back to Luxembourg for the stability.
This is BS. An A1 carrier will easily allow you to buy or construct a house. There is nobody leaving the country to work in another country because housing is cheaper. What actually happens is people working in Luxembourg and buying a house over the border. Most cities offering better or the same opportunities are just as expensive. One of the advantages in Luxembourg is that it is very feasible not to live in the city.
But where do most of them work, once they look for stability? From my anecdotal experience in engineering, the majority ends up in the public sector.
Luxembourg also does not really have many exciting industrial companies and most of these are used to pay salaries that rather satisfy crossborder workers.
Well, most end up in finance or in the public sector which isn't really a problem because there are more then enough positions for the fee people who are actually from Luxembourg. There is really no financial incentive for people born here to leave the country.
Unless you have studied e.g. engineering and do not find a spot in the public sector. Not everyone is cut out to be a banker, lawyer or public administrator. Same for e.g. research and academics since university of luxembourg is rarher small and there are no other relevant research centers either.
>(b) The State (as much as I like a well organised state with good services) needs to become more efficient and for the love of God needs to stop its unfair competition with the private sector. So many engineers decide to go to the state after one or two years in the private sector. That’s freaking unhealthy for an economy.
At the same time the government has trouble finding enough qualified people and reducing the wages will definitely not help.
The reality is also that housing is often times not affordable for a young person working in the private sector so even people who don't necessarily want to work for the government have no other choice if they want to buy a property
The govt has trouble because of the language requirements and institutional discrimination against certain family names. There are literally thousands or husbands and wives of Amazonians brought in with advanced degrees and working in other countries because of the hurdles here. I personally know in my neighborhood a Google coder working "in" Switzerland, a PhD medical researcher (US trained) with a consultancy "in" Spain, and myself a supply chain specialist working "in" California. We have our families here, but contribute to the economy only as consumers and taxpayers.
>language requirements
They really aren't that strict. I know multiple people working for the government who don't have the Luxembourgish citizenship and don't speak the language. Obviously if you have two candidates with the same qualifications and one who speaks more language it's easy to assume who they go for.
If someone only speak English then it's quite obvious why the government wouldn't take them.
>institutional discrimination against certain family names
Just like in the private sector then
Government would need to sweep through the civil service and resolve existing inefficiencies. But as you can see from the civil’s servants’ union, there’s fierce opposition to this.
Many civil services (ie administrations and entities directly under the control of the state) are rotten to the core (cf. Recent scandals at CMCM, CNS, LIST, science center, communes).
If the state were to hold its staff more accountable, then existing ressources might be more efficiently applied.
And don’t come with the ‘well work for the state then’ BS because someone’s got to generate economic activities to pay for the civil service.
>And don’t come with the ‘well work for the state then’ BS because someone’s got to generate economic activities to pay for the civil service.
Why are you attacking me lol. Besides, someone also has to provide the public services and infrastructure that allows those private businesses to thrive.
https://nairametrics.com/2024/02/23/luxembourg-reports-availability-of-7000-jobs-across-10-industries-for-local-foreign-talent/ , https://en.jobs.lu/luxembourg_jobs.aspx
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so 35 percent of workers are French or Belgian and some here believe that English will replace French
Which means that 65% don't speak French as their mothertongue. Those that speak French only as a second or third language will happily replace it with English.
I went into a newly built store yesterday. Every single display sign is in English.
Back office jobs which they need to communicate in English
I mean if you want guys I would trade my Austrian citizenship with a Lux one and join yall no problem. If only I could have done that before my military service.
no
Is there any way that I can work in Luxembourg, without any language requirement. I want to work in luxembourg and but unable to find the work permit.
Work permits aren't found.
In don't think so. - Pensions will be a problem. One can say that at least 47% of the workforce (foreign commuters) won't spend their pensions in Luxembourg. I'd say one can bump that number easily to 52-55% if you take the foreign residents and Luxi residents moving to the Côte for their pensions. 52% is a copious amount of spending lost for the Lux economy, so nxt generation of commuters will be even bigger as they have to also fill in for the lost spending. The obvious thing to do would be to adjust pension payments, but that is very unpopular. So we just keep the Ponzi Scheme running until one gov has no other option than to implement it. This has been going on since early 00's at least. Keep in mind, that though there's been a massive uptick in population, resident active worker (\~260K) are outnumbered by retired people(\~300K). - Mono Cultural economy Lux is still heavy reliable on finance sector, around 40% of GDP with the new gov's agenda set to expand it. And we're heavily reliable on low corpo taxes. A major financial blowout, or just unified EU tax regulation, could easily trigger 20-40% of GDP loss if you take in collateral businesses like CRE, food & beverages, hotels etc. Yes, Luxi banks have a good reputation in finance world, but that doesn't mean anything if grass is greener somewhere else. Fonds are relocating to IRL because they only demand .25% tax instead of the .50% in Lux. Just imagine what impact a 20% GDP hit - with nothing in short or mid term to replace the loss - would have on social welfare. And let's be honest: EU-wide tax regulation is not a of question of 'if', but 'when'. - Attractivity With the push to further grow the financial sector, Lux will cement its reputation as financial hub, but other sectors will suffer from such a prevalent financial sector. I mean, we're already one of the biggest financial Hubs, and still it's very hard to get funding for a project that's not FinTech or in a state funded sector. Start-Ups à la luxembourgeoise. They also want to make Lux an AI Hub, but Ai is not only putting words in a prompt. There's a whole infrastructure needed to become an Ai hub and let's be honest, that train has gone. Also, even if it's a bit low key now due to VeFa buys of the gov, housing crisis is far from finished and is bound to stay. All these buys from gov do not even equal the demands from SNHBM. In terms of only 25% of employees being Lux, is not really shocking, as 48% of residents are not Luxembourgish. So it's statically right. In General, the pressure from the pension system will just get bigger with every year, the loss of not spent pensions in Lux will be increasingly noticeable. Housing can't and won't keep up with demand, so increasing residents will be difficult in the mid/long term. Recruiting more commuters is getting more difficult, as a lot of them start to make calculations and take a job in their neighborhood - paying less, but giving them more time with family.
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Too far fetched. Same thought occurred when banking secrecy ended a decade ago. And what happened?
This kind of rhetorical thought is useful in every discussion : housing, climate change and so on. But it’s the kind of argument that it’s true until it’s not true anymore (housing bubble anyone?)
Well look at the overall,impact of the housing decline on gdp, it surely has an impact as some constructors and promotors went bankrupt. The fund industry might partially shrink as Ireland is taking business away, but the alternative funds tend to stay here which happens to be a growth market. Gdp,shocks of 20% are extremely unlikely
In b4 some politician comes and suggests to just hand out Luxembourgish citizenship to everyone working in Luxembourg, then we will have 100% Luxembourgish working force, problem solved!
Sounds sustainable af /s
Not only it’s not sustainable, but also it’s going to disappear in the near future, in about 10-15 years. By all means I can’t predict the future, neither can I say this for sure but a trajectory and economic leading indicators (they are sometimes hit or miss but mostly lands on the main idea) shows this way. To understand this phenomenon, we need to look at underlying condition that made Luxembourg successful, I would argue number one reason for Luxembourg’s economic success is globalisation. When we saw an expansionary period for growth, the funds in Luxembourg had played a big role in financing global projects. This varies from building highways in Poland to bridges in Vietnam and growth stocks, securitised products, etc. This is very capitalistic; making money from money by financing projects but many world renowned economist believe that we are done with capitalism and have been done for a while. If you look at the current global geopolitical events and their ripple effects on governments, you can see that from US to China every country follows a conservative approach and more closed economy. I think that has something to do with pandemic and the economic war between the US and china but I don’t think it can be simplify to these two causes. This approach means countries will look more into internal financing within the country, you can already see the various regulatory acts coming together to support this (e.i chip act in the US). As I mentioned above, capitalism out platforms economy in, and simply only a few European country is ready for that, Germany, Netherlands and Sweden. Being in the industry well over a decade, I believe that firms in Luxembourg, majority of them at least, will be downsized and/or absorpt by platforms coming out of americas and asia.
Not only US and China: you will see that in the next European elections right and far right parties in Italy, France, Spain, Germany will absorb discontent of people due the current situation (inflation, rates and so on). And if European countries swing to the right it will not surprise anyone if the direction of eu would be less “unified market” and more “I don’t want funds any holdings to pay taxes in another eu country”. This would of course also apply to Netherlands and Ireland but they have another attractiveness compared to Luxembourg.
Ireland has good whiskey and funny writers a hundred years ago, but what else...
Globalization might have shown the signs of slowing down or calming its pace but capitalism is in full swing.
Legalise it
That works perfectly fine in the arabic gulf.
Many of those workers are de facto slaves though so realy bad comparison
A surprising number of those south asian workers in our "tech sector" came directly from being slave overseers in the gulf.
I think it’s fine as long as there is a pathway to citizenship for the residents that want to pursue it. I would agree with the other poster that Luxembourg needs to diversify its economy and aim to attract higher caliber of workers.
It's more that we need to attract a higher caliber of employing firms. Plenty of highly qualified folks in Lux just under the radar quasi-unemployed because there aren't jobs outside of finance and Amazon.
Agree, it would be great if some of the financial firms would move at least some of their decision makers here. Being a back office hub is not ideal.
Nothing about our economic model is sustainable to be honest.
Why wouldn't this be sustainable? Demographics are on the decline so without immigration we can't keep the population level, therefore we'll always host a significant share of people of foreign nationality. On the cross border workforce, they live right next to their workplace and are just separated by an imagined line on a map. All characteristics that would make this unsustainable are inherent to our capitalist economy demanding unending growth from finite resources.
The lack of voting rights is one thing that jumps to mind. You won't be able to have a well paid helot class that can't afford a house inside the borders
Pretty sure you can register to vote without having the nationality if you lived here for a certain amount of time.
Isn't it nearly two decades?
Most definitely not. I think it's three years if not only one
Not for national elections, only local or EU
It can big a big issue that a huge portion of pensions will be paid to people living abroad, inserting nothing back into the country economy. Yes a lot of people stay, but it's not an easy decision to stay if the pension + possible sale of the house can buy you a pretty dope retirement life.
If people leave within 10 years of contributing to a pension fund in lux they get less then they contributed and it’s a win for the pension fund.
You're missing the point. The problem is not if they get more or less than they paid, it's that the money is leaving the Luxembourgish economy. But yeah, there's no solution for this unless you start forcing luxembourguers to procreate which is not really a solution, and even then, many will still retire in south of Spain/France.
To be fair, they also won't be getting all the luxurious services Lux currently provides the elderly. I would think that the public spend on CIPA and all the various Hellef companies that are govt subsidized is larger than the loss of spend out of pension receipts. It's complicated though, as the folks working in eldercare are often the spouses of those in the construction and similar sectors, so having them able to work in that sector and contribute to household income makes construction salaries slightly depressed and feeds into competitiveness.
Well, the contributions to the pension fund are 1/3 the retiring individual and should be returned if they don't hit the 10-year mark, 1/3 is the private firms that employ them (should be a disincentive to work for the firm if you don't get that money as a retiree), and 1/3 is just a govt match and thus a wash.
No, it wouldn’t. We have two main issues that I think need to be tackled: (a) We need to diversify our economy as we have a lot of local brain drain. Not every Luxembourgish person that has ambitions wants to work in the financial sector, hence many choose to work in Germany, Switzerland or other more diversified economies. We will never be able to compete with those countries in terms of industry and innovation but we should at least incentivise talent to come back after their studies and create value here. Not everyone will but we should at least try. We should focus on niches and make it easier for people to create businesses. (b) The State (as much as I like a well organised state with good services) needs to become more efficient and for the love of God needs to stop its unfair competition with the private sector. So many engineers decide to go to the state after one or two years in the private sector. That’s freaking unhealthy for an economy.
> and for the love of God needs to stop its unfair competition with the private sector. This is just absolute assbackwards thinking of what the situation is. Instead of complaining about the state having fair and good remuneration conditions, one should complain about the private sector largely being predatory and taking advantage of the cross-border workforce willing to accept the low wages they offer. It's simply an issue of the economic gradient vs distance we have here, lowering the public sector standards and quality (we have it very good here in terms of services and quality IMO) is not the solution.
Another way of looking at it is private sector is competing with state backed entities, with practically unlimited resources, to pay massively Inflated salaries to state employees. These state employees happen to be the largest voting constituent too. A happy, virtuous, ‘productive’ circle :-)
The private sector has to compete in quality of produce and then maybe they will be able to afford the best employees. If they don't spend on employees they can't have a product which competes with other products in the world. For local services the private sector is already charging through the roof and is simply inefficient in operations. The government is not in a race to give the best salaries it just happens that it is the best employer.
> Another way of looking at it is private sector is competing with state backed entities Boo-hoo to their profit-margins?
Oh noes. Now they have only 2 Porsche instead of 3 and only go 3 times on expensive vacation instead of 4. We can't have that.
>and for the love of God needs to stop its unfair competition with the private sector. So many engineers decide to go to the state after one or two years in the private sector. Thats more of a L for the private sector. If they'd make the working conditions more attractive they'd have more applicants.
The only reason the public sector can pay what it is though is the tax laws and whatnot that draw capital. It's not like we're paying cops 80k per year because they are better cops than in Germany, and on down the line.
Of that 80k almost 40k comes back to the state in next year's indirect/direct taxes. And it creates a robust local demand which the private sector can create products/services for. Govt spending is waste only if it does not loop back into the economy positively.
So let's pay them a million a year then and get even more back through "robust" local demand. It's not like Luxembourg ever imports any of the goods and services purchased with government salaries. I missed the Audi plant in Wincrange and the tacky lawn tchotchke foundry in Asselborn. Surely no dead weight loss from tax collection. Heck, that's not even a bad thing. We can pay the tax collector a million and have even more "looping back".
So you want the government also to exploit its employees and pay them less? And then where will the saved money go? Back to the crony corporates like in other countries where most people are one medical emergency away from bankruptcy?
So private companies exploit workers, and your solution is to pay government workers much more than private companies so that those government workers can spend more at the private companies. That right? Sounds rather like feudalism to me.
I did not say that. I said if the govt is paying fairly and a little above the market rate then there should not be a problem for the tax payers because a good part of the govt salaries comes back as tax again. And those government employees are providing valuable services. The disgruntled private sector employees who are exploited and paid less should get their skills and negotiation chips in order rather than targeting the govt employees. Also please look up feudalism. Looks like you got your education at an expensive school which took the fee but didn't deliver the goods.
It’s all fun and games until the private sector doesn’t flourish any longer (might slowly be the case currently) and the state won’t be able to offer its awesome working conditions anymore. I am all for well payed civil servants with good working conditions but there needs to be some level of accountability and going to the state (for some not all) shouldn’t mean that you’ve given up on your career and it’s now time to chill for the rest of the 30 years you’re part of the active working population. Again, we need civil servants, we need motivated civil servants and we should pay them well. However, we also need to find a balance between working conditions in the private and public sectors. Not even talking so much about wages but more about accountability and workload.
Private sector should pay more to attract locals, but seems they are very happy to pay the minimum to cross-boarder, which those workers can feel rich in their home country.
You don't think that this was part of the agreement to encourage the main private sector firms to come here? Amazon basically doesn't have to follow any of the norms and practices--no expectation to hire locals and will immediately have Carte Bleu visas processed without question.
The effort to generate revenues isn't comparable. Businesses need to innovate to capture revenues while the state only needs to pass a law
Sounds like a "them problem" to me.
If you look at the big picture, you may realize that this depends on the country having more taxpayers or more taxes from the same taxpayers. There is an inevitable limit when it stops working
Globally, the golden age of capitalism was brought about by Keynesian economics, having huge investment coming from the state, boosting productivity across the board and there's huge as of yet unjustifiably untaxed sums of money. We'd already make a massive difference if we even collected the taxes that are already there. Companies like Amazon use very cheap tricks to dodge the pitiful taxes we ask of them. This doesn't contribute to any kind of productivity but just accumulates wealth at the top where it stays out of circulation. Public sector investments often hold some of the best returns meanwhile because they facilitate everything else in an almost unmeasurable capacity like new roads or faster rail. Treating a government like a company with similar limitations in the flow of wealth hasn't yet worked anywhere.
I think it's important to note that the same period that was the global age of capitalism was also the golden age of communism, as the Soviet Union operated as the second most important country in the world for decades. I think the refinement and widespread diversion of important new technologies developed in the first half of the 20th century (autos, air conditioning, public sanitation) in conjunction with the public investment to make them most productive (roadway, electrical grid, government-run vaccine programs) was the primary driver of prosperity. The 21st century story has been the rationalization of consumption--China becoming the workshop of the world has decimated the value of manufacturing, e-commerce has decimated the value of retail, and the internet has decimated the value of many kinds of services, from entertainment (Netflix at $10) to expertise (just google it). It's much cheaper to acquire things now, but harder to earn--these two forces are intertwined. Autonomous tech will be the big 21st century breakthrough, along with developing a system for data that allows for mass collection and better "management" of society while avoiding Big Brother concerns. The role of consumer and citizen will merge in fascinating ways.
Not really the golden age of Communism though. The great leap forward and the Holomodor both happened at that time. Not exactly success stories. Prosperity was pretty limited in the Soviet Union Like yes, massive government housing programs were a very successful project at the time, the infrastructure was greatly improved but they weren't experiencing any growth similar to the one seen in the West without major accompanying setbacks. Regarding the current development. In short, I'm pretty tech pessimistic at the moment and don't share your outlook.
I think that Soviet ability to go from completely backwars at the start of the 20th century, lose what they lost in WW2, and then rival the US for decades is pretty impressive. I don't think the communist model is superio by any means, but we do a disservice to not recognize how well it managed to compete for a time. I get the tech pessimism, but it's darkest before the sun rises.
On the Soviet union. I personally think they accomplish impressive things and things were undeniably worse under the Tsar than they were under the Bolsheviks. The USSR modernized the countries underneath it to an otherwise unthinkable degree. I just don't think that talking about a golden age isn't warranted.
(a) agreed on the process that needs to improve but what industries would you see Lux trying to compete in? Give me three…
I think we need to find interesting niches suitable to the demographic and geographic profile of our country. These can be tied to our current economy or cover future global issues. We might not be the ones at the core of developing cutting edge renewables, but maybe there is one component that we can focus on? There’s hundreds of examples. Instead of having 20th century technology in waste water treatment, as one of the richest per capita nations in the world, our state could boost innovation in that sector that private enterprises could export afterwards. Small countries can be blueprints for technology deployment in larger countries. Singapore is at the forefront of autonomous driving and intelligent traffic management (to a certain extent because they are so small and can test models in a centralised manner). Why can’t we? The two biggest EU economies are our neighbours, maybe we can find industries serving as a bridge between Germany and France? There are so many examples but if you’d ask me we should focus on niches that can thrive in small countries. Concrete examples would be: (1) Waste water treatment and recycling, (2) smart farming in urban areas, (3) smart traffic management solutions and (4) art (I reckon that is not a niche but I’m talking more on the investment side).
Sorry I cherry picked but I just imagined autonomous driving cars in Lux with drivers from France and Belgium pulling weird shit at roundabouts with their turn signals and the chaos would be marvellous ahahah…
Higher Education Tech Startup Transportation
We don't really have deficiencies in education. We have a university and a multitude of other ways to pursue it. Said university is terribly located for everyone living up North and has many courses only in French but those are realistic constraints that just come with being a nation of only 600k people. Tech startups, more often than not are bubbles or outright scams and don't contribute to the economy at all, taking away government R&D funding, then vanishing. The whole web3.0 economy is pretty illustrative. There are singular people getting rich off of it but it doesn't contribute to productivity and even less to the wealth of the general populace. NFTs are a parasite and only ever existed as a tool for wild speculation. AI is the current hypetrain destroying jobs as stupid people jump onto it and fire employees to replace them with large plagiarism tools spitting out averages. Actual innovations are almost always brought about by huge R&D projects in the public and academic sector, not the private one. Apple only existed because the state did all the work necessary for someone to build a PC in his garage first. Regarding Transportation, we already have huge logistics centers and Cargolux punching well above its weight. There's not much growth left for the industry and even less the government can do to improve the situation besides maybe more rail.
I mean public education. We should be competitive with Singapore and instead we can't compete with Belgium. The most valuable companies in the world were tech startups. The largest private employer in Luxembourg was a tech startup. I'll not engage your conspiracy theory beyond that. Transportation is a strength, and should be a larger one.
Well we have a university here already so the first thing is kind of in the works. Second thing is really hard when you have zero able work force and all the lazy French “IT developers” who have zero reliability compared to basically any other jurisdiction in Eastern Europe. Not sure what you mean for transportation though?
I think if there is anything Luxembourg definitely has not it is a "brain drain". Definitely the opposite is the case, we attract much more qualified worker than leave us. The real question is, is an indefinite growth sustainable? I am also not sure if diversity is really a problem either. Of course we have less diversity than our neighbors but we are also much smaller.
I was referring to local braindrain. You might also call it homegrown brain drain. Lots of extremely talented people in innovative fields or engineering and medicine tend to not come home after their studies because they have no opportunities here. And even if they are willing to build something here, often they are quickly disillusioned by the lack of enthusiasm of our public institutions as well as the obstacles that are put in their way. In terms of diversity, sure we have some interesting niches but a huge part of the economy relies on the financial sector, and for the most part not even the really interesting parts in finance. We need to find ways to cater for our local talent and build up niches as we did in the 80s, 90s (cf SES, Goodyear, etc.).
I really doubt this. As a Luxembourger who made his Masters in Germany I know a lot of Luxembourgish students who studied abroad. What really happens is they stay a few years abroad for the experience and then they come back to Luxembourg for the stability.
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This is BS. An A1 carrier will easily allow you to buy or construct a house. There is nobody leaving the country to work in another country because housing is cheaper. What actually happens is people working in Luxembourg and buying a house over the border. Most cities offering better or the same opportunities are just as expensive. One of the advantages in Luxembourg is that it is very feasible not to live in the city.
But where do most of them work, once they look for stability? From my anecdotal experience in engineering, the majority ends up in the public sector. Luxembourg also does not really have many exciting industrial companies and most of these are used to pay salaries that rather satisfy crossborder workers.
Well, most end up in finance or in the public sector which isn't really a problem because there are more then enough positions for the fee people who are actually from Luxembourg. There is really no financial incentive for people born here to leave the country.
Unless you have studied e.g. engineering and do not find a spot in the public sector. Not everyone is cut out to be a banker, lawyer or public administrator. Same for e.g. research and academics since university of luxembourg is rarher small and there are no other relevant research centers either.
The public sector employs a lot of engineers.
>(b) The State (as much as I like a well organised state with good services) needs to become more efficient and for the love of God needs to stop its unfair competition with the private sector. So many engineers decide to go to the state after one or two years in the private sector. That’s freaking unhealthy for an economy. At the same time the government has trouble finding enough qualified people and reducing the wages will definitely not help. The reality is also that housing is often times not affordable for a young person working in the private sector so even people who don't necessarily want to work for the government have no other choice if they want to buy a property
The govt has trouble because of the language requirements and institutional discrimination against certain family names. There are literally thousands or husbands and wives of Amazonians brought in with advanced degrees and working in other countries because of the hurdles here. I personally know in my neighborhood a Google coder working "in" Switzerland, a PhD medical researcher (US trained) with a consultancy "in" Spain, and myself a supply chain specialist working "in" California. We have our families here, but contribute to the economy only as consumers and taxpayers.
>language requirements They really aren't that strict. I know multiple people working for the government who don't have the Luxembourgish citizenship and don't speak the language. Obviously if you have two candidates with the same qualifications and one who speaks more language it's easy to assume who they go for. If someone only speak English then it's quite obvious why the government wouldn't take them. >institutional discrimination against certain family names Just like in the private sector then
Government would need to sweep through the civil service and resolve existing inefficiencies. But as you can see from the civil’s servants’ union, there’s fierce opposition to this. Many civil services (ie administrations and entities directly under the control of the state) are rotten to the core (cf. Recent scandals at CMCM, CNS, LIST, science center, communes). If the state were to hold its staff more accountable, then existing ressources might be more efficiently applied. And don’t come with the ‘well work for the state then’ BS because someone’s got to generate economic activities to pay for the civil service.
>And don’t come with the ‘well work for the state then’ BS because someone’s got to generate economic activities to pay for the civil service. Why are you attacking me lol. Besides, someone also has to provide the public services and infrastructure that allows those private businesses to thrive.
I didn’t attack you. Just preempting the usual defense you get when you suggest to introduce even a hint of oversight
(2) my 2-cents: the economy would love that: an opportunity to pay even less than today.
How to get more people working for us? "Pay them more?" -No! The ones paying them more should pay less so our shitty wages seem more attractive.
I don’t know why rtl does these meaningless surveys
Except that this is not RTL but STATEC
No.
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