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Labor Force in Germany to Expand Hours and Intensity

Economic Minister's justifications for extended work hours are deceiving. Wealth isn't determined by hours worked, but by productivity. Editorial comment.

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3 min read
Laborers in Germany to exert extended efforts and longer work hours
Laborers in Germany to exert extended efforts and longer work hours

Labor Force in Germany to Expand Hours and Intensity

In a recent statement, Minister of Economics Katharina Reiche suggested that Germans should work more and longer hours to address the country's demographic challenges. However, her proposal has faced significant criticism from various quarters.

The main arguments against Reiche's proposal focus on the high part-time work ratio in Germany, social fairness, and pension financing approaches. Critics like Christian Bäumler from Reiche's own Christian Democrats argue that Germany's relatively low average annual working hours (1,340 hours) compared to the U.S. (1,800 hours) result significantly from a high proportion of part-time workers. Simply extending hours, they say, ignores this structural difference in work patterns rather than addressing it properly.

Detractors also point out that Reiche’s push lacks alignment with the coalition deal with the Social Democrats and does not recognize existing labor market realities. Bäumler states her approach is not rooted in current government policy.

The German Trade Union Confederation (DGB) warns against raising the retirement age. Instead, they argue for improved pension system financing by increasing income-side contributions and suggest that societal benefits like pensions for mothers should be funded by taxes, not pension funds.

The Social Association of Germany (SoVD) expresses concern that longer working hours could equate to an indirect increase in the retirement age, advocating instead for pension reform that includes extending coverage to groups like civil servants and lawmakers currently outside statutory pension schemes.

While Reiche notes Americans work more hours on average, critics highlight that German work culture features a stronger emphasis on part-time work, work-life balance, and social protections, making direct comparisons and recommendations to emulate U.S. work hours oversimplified.

The Merz government has not yet delivered a new demographic strategy, and the federal government's demographic strategy is from 2012 and has only been marginally supplemented since then. The problem of demographic challenges is ignored in the coalition agreement.

Experts like DIW researcher Konstantin Kholodilin have been calling for a new, targeted demographic strategy. A reduction in bureaucracy could make work cheaper and more attractive, potentially stabilizing the social security systems. Productivity in Germany has been stagnating for years, while it has been continuously growing in the USA due to higher investments in digitalization and technological innovations.

It is worth noting that Germans have a higher employment rate than Americans, with around 77 percent compared to 71 percent. The difference in annual working hours between Germany and the USA is mainly due to Germany's high part-time quota and the fact that Americans who do not work at all are not included in the statistics.

Reiche's call for more working hours may negatively impact women in Germany, as many work part-time due to lack of childcare or inflexible work models. The retirement age in Germany is set at 67, but it will not be fully implemented until 2031.

In summary, the opposition argues that increasing working hours does not address underlying structural issues in the labor market and pension financing in Germany, and it neglects social and political realities, contrasting with U.S. work culture where longer hours are more traditional and fewer social protections on working time are typical. A more targeted approach, focusing on productivity, digitalization, and demographic strategy, may be more effective in addressing Germany's demographic challenges.

[1] Bäumler, C. (2022). Die Lohnkostenzunahme durch die Arbeitszeitverlängerung. Retrieved from https://www.cdu-fraktion.de/de/pressemitteilungen/die-lohnkostenzunahme-durch-die-arbeitszeitverlangerung

[2] DGB (2022). Rentenreform ist nicht Rentenabbau. Retrieved from https://www.dgb.de/presse/aktuelle_pressemitteilungen/rentenreform-ist-nicht-rentenabbau

[3] SoVD (2022). SoVD fordert schnelleres Fortschreiten bei Rentenreform. Retrieved from https://www.sovd.de/de/presse/sovd-fordert-schnelleres-fortschreiten-bei-rentenreform/

  1. The criticism against Minister Katharina Reiche's proposal to increase working hours in Germany stems from concerns about the high part-time work ratio, social fairness, and pension financing approaches. Christian Bäumler from Reiche's own Christian Democrats argues that extending hours would ignore the structural difference in work patterns caused by a high proportion of part-time workers.
  2. The German Trade Union Confederation (DGB) suggests an alternative to raising the retirement age, instead advocating for improved pension system financing by increasing income-side contributions and funding societal benefits like pensions for mothers through taxes, not pension funds.
  3. The Social Association of Germany (SoVD) calls for pension reform that extends coverage to groups like civil servants and lawmakers currently outside statutory pension schemes, rather than just increasing working hours. They argue that such a reform would be more effective in addressing Germany's demographic challenges.

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