The President of the Kiel Institute for the World Economy, Moritz Schularick, is calling for a re-evaluation of employment protections in Germany, specifically suggesting the removal of job security for both civil servants and high earners. Schularick questioned the rationale behind preferential treatment for public sector employees, asking, “Why is there this special treatment?”
Schularick argued against maintaining protections for those earning over 100,000 euros annually, stating a “paternalistic protective idea” is being carried forward into the 21st century, one that may have been outdated by the end of the 20th. He believes this approach is no longer contemporary.
Schularick’s concerns extend to the broader economic impact, asserting that Germany’s rigid labor market is a disadvantage. He explained that companies are hesitant to take risks on projects when the cost of potentially prolonged employment for a team of 20 developers following a failed project is high.
Economic Advisor Raises Concerns
Economist Veronika Grimm cautioned against lightly questioning job security in the public sector. She stated that reducing these protections requires consideration of the salaries needed to attract qualified and trustworthy public servants.
Grimm emphasized the importance of civil service in areas requiring integrity and loyalty to the state, describing it as a “sharp sword.” She questioned what alternative incentive systems could be implemented.
Frequently Asked Questions
What is Moritz Schularick proposing?
Moritz Schularick is proposing the removal of job security protections for both civil servants and employees earning over 100,000 euros per year.
Why does Schularick believe these changes are necessary?
Schularick believes the current regulations are outdated and contribute to Germany being an expensive location for businesses, leading to the relocation of research and development to countries like China.
What concerns has Veronika Grimm raised regarding these proposals?
Veronika Grimm cautioned that loosening job security in the public sector requires careful consideration of the salaries needed to attract qualified and trustworthy civil servants.
As Germany grapples with economic pressures and evolving global competition, how might changes to employment protections impact the balance between innovation and social welfare?
