The President of the Kiel Institute for World Economics (IfW), Moritz Schularick, has ignited a fierce debate with a proposal to significantly expand working hours without commensurate wage increases, sparking anxieties over labor rights and economic restructuring. In an interview with the “Neue Osnabrücker Zeitung” Schularick argued that a collective 10% increase in working time is a necessary condition for renewed economic growth, a proposition met with immediate skepticism from labor unions.
Schularick’s argument hinges on a perceived stagnation of the German economy, attributing it, in part, to rigid labor laws and insufficient dynamism. He directly appealed to unions to abandon resistance to reform, warning that inaction risks a far more detrimental economic slide than they anticipate. He sharply criticized the union’s tactics, accusing them of using their influence to extract subsidies for declining industries rather than facilitating the critical shifts required for future competitiveness.
The proposal extends beyond simply increasing hours. Schularick champions a more flexible labor market encompassing a loosening of protection measures. He specifically called for a modification of existing safeguards, particularly those benefiting high-earning employees and argued that the cost of hiring must be reduced to incentivize businesses to expand. These pronouncements directly challenge the entrenched principles of German labor law, which have long prioritized job security and employee protections. “Our labor laws still breathe the spirit of the 70s and 80s. Those decades are half a century behind us” he stated.
Furthermore, Schularick highlighted Germany’s comparatively low employment participation rate of older workers, characterizing the nation’s arrangements as a “early retirement paradise”. He suggested drawing inspiration from Nordic countries, where older individuals commonly remain in the workforce well into their sixties and seventies, prompting further questions about the potential impact on existing pension systems and the prospect of forced or incentivized extended working lives.
The controversy has escalated concerns about a potential erosion of worker rights and a widening gap between economic growth and social equity, placing considerable pressure on the ruling coalition to address the complex interplay of economic necessity and social responsibility.
