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Economists Confused: Where Has All the Workforce Gone?

2022-07-04T03:04:42.564Z


Economists Confused: Where Has All the Workforce Gone? Created: 07/04/2022 04:54 By: Max Mueller One look, 1000 questions: John Travolta in "Pulp Fiction". © Miramax Chaos at the airports, closed restaurants: Employers are often unable to fill their vacancies. Even experts are puzzled. Cologne – Vincent Vega comes into Mia Wallace's apartment in the Tarantino classic "Pulp Fiction" and looks


Economists Confused: Where Has All the Workforce Gone?

Created: 07/04/2022 04:54

By: Max Mueller

One look, 1000 questions: John Travolta in "Pulp Fiction".

© Miramax

Chaos at the airports, closed restaurants: Employers are often unable to fill their vacancies.

Even experts are puzzled.

Cologne – Vincent Vega comes into Mia Wallace's apartment in the Tarantino classic "Pulp Fiction" and looks around in amazement.

Arms: Outstretched for help.

The look: extremely irritated.

The scene is now one of the most well-known memes and illustrates the big problem of the local economy: Where have all the workers gone?

What was funny in the cinema is a big problem for employers.

In Bavaria, the “Puls” festival was canceled because there were no security guards.

Europapark has to cap the number of visitors and has just advertised 128 jobs, many of them permanent.

The airports in NRW collapse under the travel load.

All over the country, there is a lack of staff.

A status quo that is changing the entire economy. 

Airport chaos, closed restaurants: "It's not because of the bad employers"

Marcel Fratzscher has been concerned with this development for a long time.

He heads the German Institute for Economic Research (DIW) and is Professor of Macroeconomics at the Humboldt University in Berlin.

“There is a lack of jobs everywhere – from highly qualified jobs to dishwashers.

Airports and gastronomy are currently hit hardest," says Fratzscher

fr.de

from

IPPEN.MEDIA

.

But where is the workforce?

"There are explanations for this, but they haven't convinced me so far."

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Enzo Weber says he knows the answer.

Weber has been observing the labor market very closely for many years.

The economist from the Institute for Labor Market and Occupational Research has just published a study.

The realization: There is no "big quit", i.e. a large-scale exodus of workers.

It is also not “due to the bad employers who are sacking people in bulk”.

Economists are puzzled: where has the workforce gone?

Then what is it?

The fact that the hardship of the pandemic has increased the psychological strain on many employees to pull themselves together to apply to another industry where the salary is better and the working conditions more bearable - that's not a trend in the numbers either, says Weber.

The answer is much more profane.

"There was too little hiring during the pandemic," he explains.

Fratzscher is not convinced.

"Then the German economy would have to boom, but it doesn't.

We are just reaching the pre-corona level.

People must have turned their backs on the job market.”

Corona, demographic change: The labor market is facing major problems

The two economists do not agree on why, but they do agree on what.

There is a shortage of workers, and on a large scale.

Pandemic is one reason.

New jobs have emerged that did not exist before.

"Anyone who used to work as a waiter in the pizzeria on the corner could suddenly work in the test center," says Weber.

At the same time, many restaurants had been closed for a long time and fewer staff were needed at the airports.

The consequences are now obvious. 

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In the shadow of Corona, a development is also starting that can no longer be stopped.

Demographic change is slowly but surely taking hold.

“In ten years, four million more people will retire than young people will enter the labor market.

With a total of around 40 million employees in Germany, that's a hard blow," predicts Fratzscher.

Immigration: "Need a migration balance of 400,000 immigrants"

An obvious solution: recruit new workers from abroad.

But that is easier said than done.

"If you want to maintain the number of jobs in Germany, you would need a migration balance of 400,000 immigrants every year," calculates expert and study author Enzo Weber.

A reform of immigration law is necessary, emphasizes Fratzscher.

For example, the language requirements are far too high.

There are also problems in terms of integration and the recognition of qualifications.

There is also a second hurdle that is often forgotten.

“People are also moving away from Germany.

Every tenth immigrant leaves Germany again,” says Weber.

In this respect, a balance of 400,000 is unrealistic.

Fratzscher's plan: involve women more, regulate mini-jobs, higher minimum wage

For Fratzscher it is only possible with far-reaching changes.

“The greatest untapped potential in the German labor market is women.

Almost half of all working women work part-time.

We have to abolish marriage splitting and expand daycare places if we want to use this lever."

Otherwise, it would not be worthwhile for women to work longer hours, if only for tax purposes.

Over a million mini-jobbers have lost their jobs.

Marcel Fratzscher

Fratzscher's second demand is: regulate mini jobs.

Such employment relationships should at best be a part-time job, never a main occupation.

“Mini-jobbers have been treated particularly badly during the pandemic.

They were not entitled to short-time work benefits.

Over a million mini-jobbers have lost their jobs.”

In addition, the minimum wage should be increased.

“The pressure in companies to make work processes more efficient will increase.

That is the prerequisite for being able to pay rising wages at all.” 

Workers dictate the conditions

For employees, these developments do not have to be threatening per se – on the contrary.

Weber is even convinced that there will be full employment in Germany by 2030.

Fratzscher even observes a downright tectonic shift.

“Workers are becoming more powerful.

We are seeing a transformation from an employers' market to an employee's market,” he says.

However, this is not yet reflected in wages, explains Fratzscher.

This is due to the low wage rate in Germany, which means nothing other than: the share of the cake that goes to the employees is very small compared to the share that the owners and investors get.

"Finding a balance here is not only fair, but also makes sense from an economic point of view," says Fratzscher.

(Max Mueller)

Source: merkur

All news articles on 2022-07-04

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