Expert predicts: "Our children will be more prosperous"

Created: 01/03/2023, 09:45 am

The decarbonization of the economy will bring enormous technological advances.

This also has an impact on the labor market – positive, as the labor market researcher expects.

© Henrik Schmidt

Career opportunities and income are increasing – class instead of mass.

An opportunity especially for young people.

An interview with the labor market researcher and economics professor Enzo Weber.

Nuremberg – Economics professor Enzo Weber is optimistic about career opportunities, progress and growth.

The labor shortage also has positive effects – for example on income.

"The young generation will be the richest that has ever existed," you said recently.

They contradict the general pessimism.

How do you come to your assessment?

There is reason enough to be pessimistic.

The war, the energy crisis, inflation, the long-term effects of Corona, climate change, the aging of our society - this is a critical mixture.

As a result, many fear that our prosperity could decrease.

You don't see it that way.

We have to ask ourselves: where does wealth really come from?

In any case, cheap energy is not crucial.

Prosperity is created through technological development and the improved use of labor - i.e. through increased productivity.

We now have levers in our hands that were not available to previous generations.

By that I mean, first of all, intelligent digitization, which can make human work more effective and at the same time more humane.

And secondly, the greening of the economy, which will produce completely different innovations and business models than we have known up to now.

Are you anticipating a new industrial revolution?

At least we have a chance to end the fossil age.

Over the past 15 years we have generated a good part of our growth by increasing the number of employees.

That was growth through mass.

In the future we will see more growth through class.

This is another reason why our children's generation will be wealthier than we are.

Increasing productivity means, for example, that people generate more wealth for every hour they work.

In the case of digitized factories, in which fewer and fewer people work, this is easy to imagine.

But why do wind turbines increase productivity compared to fossil fuels?

One of the reasons why wind and solar systems produce very cheaply is that they use natural energy that is available free of charge.

In addition, they cause hardly any ecological damage that would have to be repaired at great expense.

The gigantic investments to build the renewable energy system might contradict your optimism.

A static view fails to recognize the future leaps in development.

The costs will go down.

The automobile around 1900 was also not yet suitable for market use.

Economic development is a dynamic matter.

In this way, decarbonization will produce similar advances as other technologies before it.

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Expert Weber sees employees at an advantage

What role do inheritances play for the material future of the younger generation?

In fact, older people are bequeathing increasing amounts of material private wealth to younger people, of course not evenly distributed.

However, I consider the public prosperity that is passed on from one generation to the next to be more important: the functioning legal and social system, infrastructure, education and research.

This shared wealth forms the basis for work to become more productive in the future and for individuals to benefit.

When I was born - 1961 - we were 1.3 million people.

In my daughter's year of birth – 1997 – there are 800,000.

The declining strength of the birth cohorts is now leading to a shortage of workers.

What does this mean for the future income of today's young people?

This demographic change improves the chances of many employees to enforce their demands on the employer.

They know: People are scarce;

if I fire someone, I may no longer be able to fill the position.

So they are more inclined to cater to the requests of the staff.

This also has a positive effect on income.

The golden age isn't about to break out right away.

We still have a low-wage sector in which about a fifth of the workforce works.

Can the low-wage sector shrink?

The wind has shifted a bit.

While more and more people worked for low wages in the 2000s, since 2010 lower wages have also benefited from wage increases.

A minimum wage of 12 euros per hour is added.

Does the quality of jobs also improve if young people can make more demands?

That's what I'm expecting.

That started before Corona.

Although the individuals with their demands for flexible working hours had it even harder back then.

But during the pandemic, flexibility became the collective norm.

So the home office is here to stay?

Yes, albeit not at lockdown levels.

The demands and experiences are now in the world.

There's no turning back.

And the technical possibilities are also advancing.

Enzo Weber (born 1980) works at the Institute for Labor Market and Vocational Research of the Federal Employment Agency in Nuremberg.

He also teaches as a professor at the University of Regensburg.

© Enzo Weber

Home office: Companies need good concepts for mobile work

For employees, working from home means a gain in freedom, but for companies and society it may mean a loss of productivity because some people retreat to their home comforts.

Research showed that even before Corona, when employees retire, it has more to do with other problems in the company and less with the home office.

On the other hand, if the employees feel motivated, the company gets more in return if it gives its people more freedom.

In order to avoid undesirable side effects, companies now need good concepts for mobile work.

You should make the rules, responsibilities, and feedback transparent.

In principle, the number of people in employment in Germany has been increasing since the 1950s, and particularly so over the past decade.

Can this continue in the coming decades?

Probably not.

Growth through an increasing number of employees is probably over.

When the birth rate is well below two children, as in Germany, the number of young people entering the labor market decreases.

But we can stop the shrinkage if we pull several levers at the same time.

One of them: If we invest in the qualification and support of the long-term unemployed and unemployment falls even further, we will gain an additional million jobs.

And the other levers?

There is still a lot of potential in the labor market for older people, especially if we systematically find suitable job profiles and qualify people in this direction in good time.

Comprehensive childcare and flexible working hours are important in order to avoid a setback in the professional development of women.

An open immigration policy, better integration, extra-occupational qualifications and language support would make it easier for immigrants to gain a foothold here and develop further in the labor market.

The employment rate of foreign women in particular is very low today.

After all, a clear family-friendliness would help our birth rate to rise again.

Would you say that our children will have it better than we do?

In absolute terms, yes – measured in terms of prosperity per capita.

But I don't think much of such comparisons.

Each generation is in a different situation, has its challenges and can make the best of it.

So the promise of advancement and progress made by the social market economy is still valid?

Climbing the social ladder is difficult for many.

Because the educational background in the family still has a major impact on the children's chances;

poor education is often inherited.

Although we could definitely change that with a more integrative education system.

The means for this must be available – I also mean that when I refer to the prosperity of the younger generation.

Progress and growth also remain possible, but differently.

We will have to abandon ecologically unsustainable economic and consumption patterns, including the use of fossil fuels.

Interview: Hannes Koch