Matthias Knuth "The impossible gets done at once; the miraculous takes just a little longer." Labour market reforms and the German "jobs miracle" European Economic and Social Committee Workers' Group Extraordinary Meeting 6-7 March 2014, Athens
Average yearly unemployment rate (left-hand scale) and changes in GDP (right-hand scale, adjusted for price) 1971-2012 14 8 rate of GDP change against previous year (per cent) 12 6 unemployment rate (per cent) 10 4 8 2 rate of GDP change unemployment rate 6 0 average growth rate of period 4 -2 2 -4 0 -6 2
Working-age population, employment (covered by social insurance), volume of work, average weekly hours 60.000 60 population 15 - 64 55.000 55 numbers of 50.000 50 persons in gainful emloyment (billions of) hours thousands 45.000 45 employment covered by social insurance 40.000 40 volume of work (right-hand scale) 35.000 35 average weekly 30.000 30 hours (right-hand scale) 25.000 25 3 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Most relevant institutional changes 2002-2005 • deregulation of temporary agency work • deregulation of crafts: in some, master craftsmanship no longer required for running an enterprise • re-regulation and political/institutional endorsement of 'mini-jobs' • reorganization of the PES in order to offer more effective labour market related services • invigoration of the 'work first' principle for jobless benefit recipients • retrenchment of earnings-related benefits for jobless people: • replacing unemployment assistance by flat-rate minimum income benefits ('Hartz IV', 'unemployment benefit II') • shortening maximum unemployment benefit duration for older workers • phasing-out early retirement... • ... which used to entail unemployment as an entry ticket • erosion of collective agreement coverage and of works council representation... 4 • ...in the absence of a legal minimum wage
Collective agreements (CA) and existence of works councils (WC) in western and eastern Germany (as a percentage of workers covered in companies with five or more employees) 100 21 24 25 27 30 31 32 34 35 38 40 41 41 42 80 2 47 45 1 1 1 1 2 1 1 28 25 24 24 23 22 21 21 5 neither CA nor WC 60 4 3 4 per cent 4 4 3 company-based CA / no WC 3 21 16 15 16 16 18 13 16 sectoral CA / no WC 40 sectoral CA / with WC 39 37 37 36 32 30 31 29 company-based CA / with WC 25 25 23 22 19 18 18 15 no CA / with WC 20 8 10 9 10 9 10 11 6 6 6 7 6 9 6 6 6 9 10 10 9 10 9 9 8 8 8 7 7 6 6 5 4 0 1998 2000 2002 2004 2006 2008 2010 2012 1998 2000 2002 2004 2006 2008 2010 2012 5 west Germany east Germany
Annual flows between unemployment and employment (left-hand scale) and average annual level of employment (right-hand scale), 1998-2012 4.500 45.000 numbers employed unemployment --> employment 4.300 43.000 employment --> unemployment 4.100 41.000 3.900 39.000 numbers employed (thousands) transitions (thousands) 3.700 37.000 3.500 35.000 3.300 33.000 3.100 31.000 2.900 29.000 2.700 27.000 2.500 25.000 6 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Rates of transition from unemployment to employment by duration of preceding unemployment – West Germany 1998 – 2011 (direct job creation schemes exluded) < 6 months 6-<9 months 9-<12 months 1-<2 years 2 years and more Source: Ursula Jaenichen & Thomas Rothe, Beschäftigungsstabilität und Entlohnung nach Arbeitslosigkeit 1998 bis 2010, WSI- 7 Mitteilungen 3/2014 (forthcoming) – unemployed between 25 and 54, gliding 3-month-averages of seasonally adjusted monthly values, excluding data from fully municipalized jobcentres
Employment of men and women in standard and atypical jobs: absolute numbers and percentages, 1991-2012 40.000 40 women in atypical employment 35.000 35 men in atypical employment 30.000 30 women in 'standard' 25.000 25 employment thousands pPer cent men in 'standard' employment 20.000 20 total percentage of 15.000 15 atypical employment percentage of 10.000 10 atypical employment, men 5.000 5 percentage of atypical employment, 0 0 women 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 8 Source: Federal Statistical Bureau; part- time ≥ 20 hrs./week 'standard employment'
Source: Giannelli, Gianna Claudia; Jaenichen, Ursula; Rothe, Thomas (2013): Doing well in reforming the labour market? Recent trends in job stability and wages in Germany (IZA Discussion Paper, 7580). Labour turnover and the economic cycle 0,090 8,0 0,085 6,0 quarterly year-on-year GDP change 0,080 4,0 labour turnover rate 0,075 2,0 0,070 0,0 – 2,0 0,065 quarterly year-on-year GDP change – 4,0 0,060 quarterly labour turnover – 6,0 0,055 rate – 8,0 0,050 12341234123412341234123412341234123412341234123412341234123412341234 9 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Jaenichen, Ursula; Rothe, Thomas (2014): Beschäftigungsstabilität und Entlohnung nach Arbeitslosigkeit 1998 bis 2010, WSI-Mitteilungen 3/2014 (forthcoming). Yearly median daily wages (price-adjusted) in newly entered full-time jobs , west Germany all men all women men after unemploy- ment women after unemploy- ment 10
Conclusions • trend reversal on German labour market primarily attributable to demographic change, slow-down in productivity and expansion of part-time jobs • resilience during crisis 2008/2009 due to traditional virtues of 'co- ordinated capitalism', not to reforms • reforms did 'activate' the short-term unemployed but failed to adequately address long-term unemployment • apparently good labour market performance tends to cover up downsides (most of which developed before the reforms): • increasing shares of 'atypical' employment (though recently halted) • wage stagnation, increasing wage inequality, growing low-wage sector • erosion of collective bargaining coverage more important than overt deregulation • decline in quality of job offers is stalling labour turnover: functioning of German labour market as an allocation mechanism has deteriorated as a result of 'flexibilisation' skills shortages resulting from demographic ageing cannot be addressed adequately 11
Recommend
More recommend
