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Labour market in Germany
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• General aspects
• Around the turn of the last century, it was the
  15-70 year old cohort who provided for the
  under-15 and over-70 age groups. However, at
  that time, only two percent of the population
  were 70 or older.
• Today, young people in Germany start their
  working lives at an average age of 25 years and
  retire at the age of 60.
• This demographic shift creates many problems for
  Germanys pension and health care insurance
  schemes.
• This not primarily an impact of demographic
  change and extended life expectancy. The
  economic situation also contributes to this as
  many of the over-55s would be able to work and
  are healthy and willing to do so, but the
  critical situation in the labour market makes it
  practically impossible to successfully find
  employment

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To remedy this situation, several reforms must
be examined

• Expanding the labour participation age.
• Increases in social insurance contributions and
  taxation
• Reduce employers labour costs
• Training for immigrants should be geared towards
  safety and quality standards.

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The situation today 1. After several years of
low growth, a cyclical recovery is finally
underway in Germany. Corporate restructuring and
wage moderation have lowered costs and improved
external competitiveness. The recovery has
benefited from an extended period of favourable
external conditions, and strong export growth is
beginning to spill over to investment. 2. The
task now is to broaden the recovery and make it
more sustainable. Improving labour market
flexibility to generate faster employment growth
is essential to raise domestic demand. Parallel
productivity-enhancing reforms in product,
service and financial markets would magnify the
impact of labour market reforms. Fiscal policies
and entitlement reforms need to cement
confidence in the sustainability of the welfare
state. The upswing provides a conductive setting
for progress in these areas.
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3. Because the VAT increase in 2007 is part of a
broader package, its impact on growth is likely
to be limited. Real GDP is projected to expand
by 2 percent in 2006, aided by one-time effects
related to the pending VAT increase and policies
that have stimulated housing construction and
remodelling 4. Employment growth needs to be
further strengthened to generate higher
household income and consumption. The recent up
tick in employment, including some expansion in
full-time jobs, is encouraging, but unemployment
at over 10 percent remains intolerably high.
Reducing it will require lower reservation wages
to bolster labour supply and employment,
especially for the lower skilled. Policies that
raise labour utilization through support for
activity rather than inactivity will have the
added benefit of reducing structural welfare
costs.
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5. Recent labour market reforms were path
breaking in several respects, but they need to
be modified and implemented better to improve
effectiveness. Short-term unemployment is easing
with the cycle and responding to reform measures
such as shorter duration of unemployment
benefits. 6. More generally, many of Germany's
labour market regulations and programs are
complex, expensive, and ineffective. Evaluation
reports indicate that active labour market
policies have created few new jobs at
substantial fiscal cost. Ineffective programs
should be eliminated and simplification of the
overall system would enhance transparency,
including for job seekers.
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7. Additional deregulation would strengthen
domestic competition and raise productivity.
Productivity determines sustainable wages and
the standard of living. 8. A more efficient
financial sector would improve the allocation of
capital to areas of highest return,
strengthening economic performance. Banks and
insurance companies are healthier than in recent
years, but they still underperform most EU peers
and the improvement in earnings is largely
cyclical.
9. Good progress has been made in reducing the
fiscal deficit in 2006 and policies are in place
to deliver further adjustment in 2007. The
mission projects the 2006 deficit to be 2.6
percent of GDP, meeting the Maastricht deficit
criterion one year ahead of schedule (and better
than the forecast in the IMF's September 2006
World Economic Outlook).
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10. To achieve further deficit reduction after
2007, measures already in the pipeline will need
to be augmented. The goal should be to achieve
structural balance by 2010 to anticipate pressure
from population aging. 11. Corporate income tax
and health care reforms need to be implemented in
a way that meets stated objectives and does not
increase fiscal risks. The reforms are important
to get right, even if it takes time to frame
sound and transparent solutions the authorities
should not rush into compromises that fail to
deliver greater efficiency and competition.
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Der Arbeitsmarkt in Deutschland
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• Allgemeines
• Zur Zeit der Jahrhundertwende zum 20.
  Jahrhundert, (ver)sorgte die Alterskohorte der
  15-70-jährigen, die Altersgruppe der unter
  15-jährigen und der über 70-jährigen. Damals
  waren jedoch weniger als 2 der Bevölkerung über
  70 Jahre alt.
• Heutzutage beginnen junge Menschen mit ihrem
  Arbeitsleben mit durchschnittlich 25 Jahren und
  gehen mit etwa 60 Jahren in Rente.
• Der demografische Wandel schafft viele Probleme
  für das Deutsche Renten- und Krankenversicherungss
  ystem
• Diese Probleme sind jedoch nicht ausschließlich
  eine Folge des demografischen Wandels, mit einer
  doppelten Überalterung der Bevölkerung (immer
  mehr werden immer älter), sondern liegen auch
  darin begründet, dass gesunde und arbeitsfähige
  über 55jährige Menschen oftmals vom Arbeitsmarkt
  ausgeschlossen sind.

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Zur Lösung dieser Probleme, müssen einige
Optionen untersucht werden

• Erhöhung der Lebensarbeitszeit
• Stärkere Finanzierung der Sozialversicherungen
  aus Steuermitteln
• Senkung der Lohnnebenkosten
• Schaffung qualitativ hochwertiger
  Ausbildungsprogramme für Migranten

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