Do Germans generally have to work more? This is what Michael Hüther, head of the employer-related Institute of German Economics (IW), calls for in an interview with the “Wirtschaftswoche”. “We have to work more and longer,” said Hüther. Otherwise he sees serious problems for the social security systems.
The demographic development is undermining pension, health and long-term care insurance alike, says the prominent economist. “Unfortunately, the dramatic consequences of demographics on the social security systems are largely ignored by the federal government.” Hüther calls for a “fundamental structural reform of the entire social security system” from politicians.
Hüther considers the rising social security contributions that employers and employees will have to pay in the coming year to be problematic. Stuffing the holes in the social security funds with ever-increasing tax subsidies as well. The employment rate, i.e. the proportion of working people, is already very high in Germany. “But there is still potential when it comes to the volume of work,” says Hüther. Part of the solution is therefore to work more and longer.
Compared to the Swiss, the Germans work two hours less per week, explains Hüther when asked how much more he thinks we should work. “If we worked 100 more hours a year, we could replace around 4.2 billion hours of work lost through aging by 2030.”
Hüther’s recommendation stands in stark contrast to some current political initiatives. At its party convention last week, the SPD decided to advocate a 25-hour week with full wage compensation “in the medium term”. The demand was raised by the Jusos and decided against the will of the SPD party leadership. However, implementation is not on the agenda for the time being, there would be no majority in the federal government for this anyway.
On the other hand, the government plans to replace the Hartz IV system with a citizen’s allowance on January 1 are concrete. On Monday, the Bundesrat will vote on where the opposition could still block the Bundestag’s decision. There are also critical voices from the IW led by Hüther about possible negative effects on citizen income. IW labor market economist Holger Schäfer said at zeit.de that he feared “that more people will settle for citizenship benefits than we currently have Hartz IV recipients.” In the Frankfurter Rundschau, Schäfer reiterated his call for the current sanction options to be retained if someone rejects a job offer. Proponents of citizen money, on the other hand, see the elimination of some particularly severe sanctions as a major step forward in the concept.
Sources: Wirtschaftswoche / zeit.de / fr.de / German Economic Institute
