Wary of repeating the experience of its predecessor, the Lisbon Strategy, in which certain quantitative goals were not met, German Chancellor Angela Merkel had initially opposed setting quantitative targets in the 'Europe 2020' strategy.
However, regarding the 2020 employment target – raising the job rate among 20-64 year olds to 75% – Berlin currently has no reason for concern. The labour market is healthy and the unemployment rate remains unchanged at 7.6%.
''The economic recovery is sustainable and the labour market has virtually returned to its pre-crisis level,'' stated Labour Minister Ursula von der Leyen recently. ''Although the crisis is not over yet, a year ago nobody would have believed that employment could recover to this current good level,'' she added.
During the economic crisis, the German government introduced 'short-time allowance plus', a measure aimed at helping stabilise the job market. Although there were still 400,000 people working on a short-time basis in June, this was just a quarter of the number recorded at the peak of the crisis.
One reason for the good state of the labour market is wage restraint. Between 2000 and 2010, wages and salaries in Germany's private sector increased by an average of 21.8%, compared with 35.5% in the EU and 29.5% in the eurozone countries. In the past decade, in no other EU member state have wages and salaries increased as slowly as they have in Germany.
However, trade unions and politicians from almost all parties are demanding that employees now reap the benefits of the upswing by receiving higher pay.
Thanks to major employment reforms carried out in the last decade – the 'Hartz laws' – the German job market has become considerably more flexible. The new laws, which were strongly opposed by trade unions and even some within the ruling Social Democratic Party, have particularly boosted the temporary job market. Yet critics are asking the question: is this 'job miracle' sustainable?
"Experience shows that the proportion of temporary positions grows the more the economic situation stabilises," responded von der Leyen. "The increase in employment in this area that is currently being witnessed does not mean that temporary workers are replacing permanent staff, but that both temporary work and regular employment are increasing in parallel.''
The demographic challenge
According to experts, the demographic trend of an ageing society in Germany will lead to a lack of employees. Well-trained engineers and care attendants are already a scarcity. To avoid a breakdown of the pension system, the government is increasing the retirement age to 67 by 2020 – meaning that those who do not work until 67 must cope with a lower pension.
A recent study found that the average retirement age in Germany is now 63, while the number of people who work beyond their 60th birthday has risen to 33%. But the study warns that more job opportunities will be needed for older workers in future. According to the Labour Ministry, this is a ''highest priority'' for the government.
At the turn of the millennium, the German government made a 'full turnaround' in its jobs policy – launching programmes to combat unemployment among seniors, maintain employees in jobs for longer and get long-term unemployed people back into work. Due to these efforts, employment among 55-64 year olds in Germany surpassed the Lisbon target of 50% in 2008 and reached almost 57% in mid-2009.
Some of the government's projects are aimed at creating jobs for older workers by establishing regional associations and alliances. Others focus on addressing employers directly and encouraging them to hire older workers. In addition, experiments are carried out to analyse the effectiveness of new and innovative instruments in order to identify the best integration strategies for older workers.
The migration challenge
In 2009, the number of emigrants from Germany exceeded the number of immigrants by 13,000. Only 547 highly qualified non-EU foreigners managed to meet the requirements for immigration (for example, an annual salary of more than €66,000). Economists estimate that Germany needs at least 200,000 immigrants each year in order to slow the current demographic decline.
There are around 15 million people from an immigrant background living in Germany. The unemployment rate among them is higher than the overall average. ''The causes for this are often problems in mastering the German language or in school and vocational skills,'' states the Employment Ministry. Yet in Sweden and the Netherlands, the chances of migrants being unemployed is about three times as high as in Germany.
The government is trying to tackle the problem through a range of schemes. The intention behind the 'nationwide integration programme' is to create a framework to manage and coordinate integration policy to establish effective and sustainable support for integration. This task has now been handed to the Federal Office for Migration and Refugees. The areas of activity are language support, integration into the workplace, education and social integration.
