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The era of colonial expansion has ended, and the Vienna Government has now shifted its focus back to domestic issues. The most pressing problem in Austria now is the uneven economic development within the country, with the wealth gap continuing to widen.
Looking solely at the average income of 64.6 Divine Shield, this figure is already quite high. After excluding children and the elderly, the income per capita for the labor force even breaks a hundred.
However, the reality is that major capitalists and the nobility earn tens of millions a year, while the vast majority of ordinary workers actually earn less than 30 Divine Shield annually.
In this respect, Franz is also a beneficiary, being a factor that skews the average income higher, yet now he must grapple with the headache of an expanding wealth gap.
Take Vienna as an example, as the city with the highest per capita income in the world, the average annual income in Vienna is as high as 328 Divine Shield.
This income level, in any country or region around the world, would correspond to the middle class and above.
As the financial, cultural, technological, and educational capitals of Austria, with so many resources at its disposal, reaching this level doesn’t seem surprising.
However, statistical data tells Franz that this is merely surface-level prosperity, with very serious internal issues already present.
Vienna has a population of 1.06 million, of which 620,000 are of working age. Only less than 11.2% have an annual income reaching 328 Divine Shield, only 29.6% exceed 100 Divine Shield, and 24.6% earn below 30 Divine Shield. (Labor force population only)
And this is the capital. With so many people earning low incomes, the situation in other regions would probably be even worse.
According to the statistics, the percentage of the national population living in poverty, with annual incomes below 20 Divine Shield, is as high as 31.2%. This is not the kind of figure one would expect from a developed country, yet it reflects reality.
The severe wealth disparity is just one aspect; the imbalance in regional development is even more shocking. In the poorest small counties, the average annual income doesn’t even reach 8 Divine Shield.
This income is likely only enough for potatoes. And this is under the assumption that Austria is a grain-producing country. In England, they would probably have to make do with wild vegetables.
And this gap is continuing to widen. Poorer regions are becoming poorer, while richer areas are getting richer.
Old problems remain unsolved, and new ones have emerged. With economic development, the urban-rural divide is widening at an alarming rate.
The five years from the abolition of serfdom in 1848 to 1854 were the golden era for rural economic development in Austria, with agricultural output increasing by fifty-six percent in these five years.
After that, rural economic development quickly slowed down, especially after the agricultural crisis in 1873, when Austria’s rural economy even experienced negative growth.
Despite rapid national economic advancement, the growth rate of Austria’s rural economy in 1875 was less than 1%, which is almost tantamount to stagnation.
With so many issues converging, Franz is practically losing his hair from worry. "Solving" the problems may sound simple, but the question is how?
It’s not just a problem for Austria; no country in the 19th century was an exception, none were able to solve these issues.
Ever since Franz raised these issues, the Vienna Government has been trying to find solutions, but reality is still so cruel.
Franz doesn’t even dare to order the bureaucrats to resolve these matters definitively, for fear that once such an order is given, he will no longer see accurate data.
This isn’t the internet era; in these times of backward communication, it’s very easy to create a facade of peace - just wave a pen and change the numbers.
Deceiving superiors and subordinates is a natural talent for the bureaucratic elite, with the neighboring Tsarist Government serving as an example. Since Alexander II initiated reforms, the Russian Empire has been developing at a startling rate on paper.
According to the figures, the Russian Empire’s industrial strength has already surpassed Austria, and it’s estimated that in a few years it will exceed the entire European Continent. Perhaps in Alexander II’s lifetime, the Russian Empire could even surpass the whole world.
In comparison to the Tsarist bureaucrats, Austria’s bureaucrats still have a conscience. There is no outright falsification of data, but neither is there such a boundless audacity.
This is Franz’s achievement. As a competent emperor, it’s essential to be clear about rewards and punishments, so he established a strict whistleblowing reward system.
You can falsify data, but you must ensure everyone is complicit. It’s not enough for the next government to comply; you must guarantee that even the following one will comply.
There is a lifetime responsibility system, and all who know but do not report bear joint liability. All honors received are revoked, and the second half of your life will be spent together in prison.
Whistleblowers are directly promoted three ranks and can join the inspection department to specifically investigate data falsification.
As a sacrifice for this policy, the bureaucrats of Bosnia and Herzegovina Province were the first to suffer. An official Franz had high hopes for, who was even on the Cabinet shortlist, also fell into this trap.
Thousands of public officials were jailed at once, with the entire bureaucratic circle of Bosnia and Herzegovina Province implicated and nearly wiped out.
In the aftermath of this incident, everyone became more restrained, and the data suddenly returned to normal.
Who doesn’t have a few political enemies in the officialdom? If the local governments were all united, the Vienna Government would never be able to sleep peacefully!
With strict oversight from above, naturally, those below dare not act rashly. It’s just statistical data after all; honestly reporting it is the way to go. Falsifying data might indeed create achievements, but it’s more likely to land you in prison.
At the Vienna Palace, during an economic conference
Franz slammed the table, "The domestic economy is growing rapidly, but the wealth gap, regional disparity, and urban-rural divide are getting increasingly serious. We’ve reached a point where they must be addressed.
If we delay any further, it will only become more difficult to handle in the future. I’m not asking for problems to be solved 100%, but we must ensure that the situation doesn’t continue to deteriorate."
Such are the low expectations, given the current level of productive forces, Franz is well aware that these problems are fundamentally unsolvable.
Being unable to solve problems does not mean we won’t attempt to resolve them. In any case, taking action is better than inaction, even maintaining the status quo would be a great victory.
Prime Minister Felix, with a stiff expression, replied, "Your Majesty, the uneven development of regional economies is mainly due to natural limitations.
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We can only make policies suitable for local conditions to foster appropriate economic development. In many areas however, due to natural conditions, neither industry nor agriculture is suitable for development.
From a broader perspective, we must make choices in these regions, prioritizing the development of areas that are easier to develop.
Urban-rural disparity is a global issue. With the development of industrial technology, the gap between industry and agriculture will only worsen.
The most effective short-term solution is to promote land consolidation and adopt large-scale farming to replace the small-scale economies prevalent in many areas.
However, this is the least advisable method. The social problems arising from land consolidation are far more severe than an increasing urban-rural divide.
In reality, neither of these issues is the crux; the most significant problem is the growing disparity between the rich and the poor and the continuous increase of impoverished individuals.
As long as we resolve the issue of income for those at the bottom, we can accept imbalances in regional development or an increasing urban-rural divide."
This is a specious argument. Without addressing regional imbalances and the urban-rural divide, how can we tackle the wealth gap?
All these issues are interrelated. Unlike other factors, income is regulated by the market, and it is impossible for the government to control it forcibly.
Franz is no longer a novice in economics; he would not naively believe that just by setting a higher minimum wage, everyone’s income will rise.
Such a thing is impossible. Different industries can bear different labor costs, and cheap labor is the competitive advantage of certain traditional industries.
So many countries have deindustrialized in later times, not just for "environmental protection"—the nominal excuse—but more so because labor costs in developed countries are too high.
Or perhaps, unions have become tools for profit for some, and capitalists have had to relocate their factories to chase higher investment returns.
Austria hasn’t developed to that point yet; many capitalists are still in the stage of making easy money, with most industries enjoying decent profits.
The main reason the lower class’s income doesn’t increase is the supply and demand relationship in the labor market. The so-called impact of labor costs on market competitiveness is in fact, nonsense.
The current price of labor, in reality, is a very low percentage of total costs. Aside from labor-intensive industries, the labor cost for many industries does not even make up one-tenth of the product price.
Compared with their British competitors, Austria’s labor and raw material costs are much lower, yet their international retail product prices are almost the same.
This greatly dissatisfies Franz. With so many advantages, capitalists are not seizing markets from the British. Evidently, the domestic market has satiated them, and their ambition is lacking.
If this is not changed to instill a sense of crisis, Austria might also fall into the "resource trap."
Capitalists from the United Kingdom and France did just that in the original timeline, content with earning money without striving for more. They watched passively as Americans and Germans surpassed them.
Changing the complacency of domestic capitalists is the core of this economic conference.
Franz, "Addressing the wealth disparity is indeed a core issue, but does the government have any plans?"
Prime Minister Felix, "To increase everyone’s income in the short term, the simplest method is still immigration. We have an excess of domestic labor, yet our colonies always suffer from a severe shortage.
We have been promoting immigration, but it’s not been enough. In the inland areas, we have hardly even campaigned, but now we must change that.
The government plans to move ten million people from the homeland to the colonies within five years. The main areas for this migration will be densely populated rural areas and poverty-stricken regions."
Once a large number of immigrants enter the colonies, the supply and demand of the domestic labor market will inevitably change, and the days when capitalists could rely on cheap labor will be gone.
Franz isn’t cruel by nature; he is compelled by reality.
The German Second Empire from the original timeline is a prime example. Despite lacking almost all resources except for coal and iron, having higher labor costs than the French, and not having many colonies to exploit, they still managed to develop.
The bonus from compulsory education was one aspect, but it was primarily the crisis awareness among businesses that drove technological innovation.
Austria has been implementing compulsory education for many years as well, and the quality of the populace is not lacking. With even richer markets and resources, there is no reason why they cannot achieve the same.
The Second Industrial Revolution started in Austria, and with Franz’s impetus, new technologies should have developed faster than in the same historical period. However, the reality is quite disappointing.
In 1875, the royal family’s industries accounted for one-third of the new patented technologies registered in Austria, and this ratio has been increasing year by year.
Through his research, Franz discovered that the core problem was that businesses had become too comfortable. With easy profits, capitalists were not willing to push for technological innovation.
This situation is determined by interests. Low labor and material costs, coupled with vast markets, mean they don’t have to make an effort to earn money.
Innovating new technology is fraught with uncertainty; the investment and returns may not align, so everyone is reluctant to take risks.
If there is no pressure, then we must create it. We have not yet entered an era of capitalist internationalization, and Franz is not worried about capitalists fleeing abroad.
International trade requires government endorsement. Behind every multinational conglomerate lies government support. Even so, these groups still often get duped by local rivals.
There are many classic cases to refer to. For instance, German investment in Austrian railway and infrastructure construction was trapped during the economic crisis by Franz.
Or consider how British capital lost everything in the great American railway construction.
Those with backing get trapped within the rules. Those without are far worse off, and don’t even need to be discreet about it.
