Germany: Government agrees employment policies

At a mid-term meeting on 23-24 August 2007, the conservative-social democrat coalition cabinet agreed a number of new policies in the field of employment for the period until autumn 2009, when the current legislative period ends. The policies focus on skills, mobility and low pay.

The initiatives announced by the government include tackling emerging skill shortages through training, measures to raise labour force participation, especially in view of an ageing population, and a fresh look at immigration rules.

On training, the government has committed itself, by 2010, to halving the number of young people who leave school without a qualification, and to increasing the financial incentives for firms that either train at a level above the average, or offer training places to hard-to-place groups. There is also a commitment to raise the proportion of each age cohort entering higher education from the current 35% to 40%.

Immigration is an area of law that was fundamentally revised in 2005. At the mid-term meeting the government agreed to revisit the entry criteria for workers into Germany and, as a short-term measure, it will grant access to the German labour market for applicants with engineering qualifications from new EU member states in central and eastern Europe. In 2004, Germany opted to restrict freedom of movement to workers from these countries for a period of seven years. It will also be easier for foreign graduates of German universities to enter the labour market on graduation.

On participation in employment and demographic change, the government has committed itself to building on existing measures to promote the employment of the over-50s ("Initiative 50 Plus"), and to producing a strategy for lifelong learning by 2008. There will be further measures to consolidate occupational pensions, with draft legislation promised by March 2008.

The cabinet decided to extend the Posted Workers Law to the postal services sector, which will allow a binding minimum wage to be set for this industry. Also in the field of minimum wage protection, the government indicated that it will submit a set of proposals in the early autumn to tackle the problem of "in-work poverty". Although there is no agreement within the coalition on a need for a statutory minimum wage, there is agreement on a need to prevent low-paid employees from claiming in-work benefits. The government has said it wants to use the child benefit system to raise in-work incomes for employees with children, and possibly to offer an "employment benefit" (Erwerbstätigenzuschuss) to single people and couples without children.

European Employment Review 404 (EER 404) contents