The influential Kiel Institute for World Economics (IfW) has ignited a fierce debate with its President, Moritz Schularick, advocating for a significant and unpaid, expansion of working hours as a critical component of Germany’s economic revitalization. In an interview with the “Neue Osnabrücker Zeitung” Schularick argued that a collective increase of 10% in working time, without commensurate wage increases, is unavoidable if Germany intends to regain economic momentum.
Schularick’s remarks represent a blunt challenge to traditional labor protections and a pointed critique of the current posture taken by German trade unions. He directly appealed to these unions to abandon resistance to reform, warning that inaction carries the substantial risk of far greater economic decline than they anticipate. He cautioned them against leveraging their influence to secure subsidies for declining sectors, urging instead active support for the transformative changes necessary for progress.
The IfW President’s vision extends beyond simply extending working hours. He calls for dramatically increased labor market flexibility, advocating for a loosening of stringent regulations to facilitate a shift of workers from traditional industries to burgeoning sectors like robotics, electric mobility and the arms industry. Notably, Schularick specifically argued for a rollback of protections afforded to high-earning employees and a reduction in the cost of hiring, dismissing existing labor laws as relics of a bygone era – the 1970s and 1980s.
Further exacerbating the economic challenges, Schularick pointed to Germany’s comparatively low participation rate among older workers, labeling the country a “premature retirement paradise”. Drawing a comparison with Scandinavian nations’ success in retaining older individuals in the workforce, he posed a direct question: why can’t Germany achieve a similar outcome?
The controversial proposals have drawn immediate criticism, with labor advocates expressing concerns over potential exploitation and a worsening of work-life imbalance. Supporters, however, frame the argument as a necessary, if uncomfortable, step to address Germany’s declining competitiveness and secure the nation’s future economic stability, a debate that is likely to dominate the political landscape for the foreseeable future.