The German government is facing increasing pressure to reconsider current working models and retirement policies, with Minister for Economic Affairs, Katherina Reiche (CDU), advocating for a shift towards longer working lives. In an interview with the Frankfurter Allgemeine Zeitung, Reiche emphasized the unsustainable nature of current trends, stating that relying on a system where individuals work roughly two-thirds of their adult lives and spend the remaining third in retirement is no longer viable.
The demographic shift and rising life expectancy, she argued, necessitate an increase in the average working lifetime. Reiche called for a re-evaluation of incentives surrounding early retirement, proposing measures to encourage individuals to remain in the workforce for a longer duration. She noted that German workers average approximately 1,340 working hours annually, significantly less than the roughly 1,800 hours worked by their counterparts in the United States.
Acknowledging the existence of physically demanding professions, such as those in construction and elder care, where earlier retirement may be necessary and appropriate, Reiche also highlighted a desire amongst many individuals to remain active and contribute their experience. She suggested that for many, continued engagement in the workforce is a vital component of overall well-being, transcending the sole pursuit of early retirement.
Regarding proposed legislative amendments to the pension package and collective bargaining regulations spearheaded by Federal Labour Minister Bärbel Bas (SPD), Reiche clarified that these measures remain under government deliberation and have been subject to internal critique and adjustments. While committed to upholding the principles outlined in the coalition agreement, she expressed the view that the current reform plans will ultimately prove insufficient to address long-term challenges.
Reiche underscored the strain on Germany’s social security system, including pension, health and long-term care insurance. She warned of the limitations being reached within these systems, citing the cumulative impact of payroll taxes, income taxes and other levies, which are diminishing the competitiveness of factor of labour in Germany.
