If we wanted to absorb the decline in the labor force, each employed person would have to work 1452 hours a year in 2030 and 1541 hours in 2040, the same as in 1993.
(Photo: dpa)
According to calculations by the Federal Statistical Office, the population aged 20 to 66 will shrink from 51.8 million today to 43.2 to 47.4 million by 2050, depending on the immigration scenario. Fewer employees mean less economic power.
Scientists at the Austrian Institute for Economic Research in Vienna (Wifo) have calculated that by 2040 we can expect a drop in per capita income of around 3,700 euros.
Overall, the local gross domestic product will be 274 billion euros lower than with a constant population, a gap that will become significantly larger in the decades to come.
If we don’t take countermeasures, the cake to be distributed will shrink and distribution conflicts will increase. Productivity advances that would compensate for the population decline are not in sight.
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Politicians are therefore hoping for increased immigration. But even in the most optimistic scenario, this will not be able to close the gap. It is imperative to find other ways to slow down the decline in the volume of work. There are starting points.
In Germany, working hours are shorter than in other countries
According to the OECD, the annual working time in Germany in 2018 was 1363 hours. This made us the country with the lowest working hours. In the USA (1786), Italy (1723), Spain (1701) and France (1520), significantly more people work each year.
Daniel Stelter is the founder of the discussion forum beyond the obvious, which specializes in strategy and macroeconomics, as well as a management consultant and author. Every Sunday his podcast goes online at www.think-bto.com.
(Photo: Robert Recker/ Berlin)
If we wanted to absorb the decline in the labor force, each employed person would have to work 1452 hours a year in 2030 and 1541 hours in 2040, the same as in 1993.
That seems feasible, but is not a political issue. Instead, an ever-increasing marginal burden of taxes and duties makes it unattractive to work more.
With ever-increasing life expectancy, the proportion of years in employment has fallen in recent years. Reversing this is not only reasonable, but also a question of intergenerational justice.
>> Read here: What Generation Z and Baby Boomers think of each other
This is also not an issue at the moment. In the coalition agreement, the federal government instead promises an unchanged retirement age and stable pension levels and contribution rates. If necessary, other sources of finance will be developed.
Wrong signals
Further potential lies in increasing labor force participation. Too many people of working age are not in the labor market. This is about empowerment, but also about incentives.
With ever-increasing life expectancy, the proportion of years in employment has fallen in recent years.
(Photo: dpa)
According to the idea, the new basic income should help through higher additional income limits and more qualification efforts. In reality, by largely refraining from sanctions, it is likely to send the opposite, wrong signal.
>> Read here: Gas, oil, supply chains – how global monopolies siphon off our prosperity
Irrespective of the significant and urgent challenges posed by demographic change, the Federal Government is conducting policy using the formulas of the past. These are not only useless, they cause lasting damage.
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