Alexander Herzog-Stein, an expert in labor markets, has contradicted statements made by Federal Chancellor Friedrich Merz (CDU) that only through increased work can the prosperity of Germany be maintained. According to Herzog-Stein, who leads the labor market economics department at the Institute for Macroeconomics and Economic Research (IMK) at the Hans-Böckler-Stiftung, it is a misconception to assume that longer working hours will lead to increased hourly productivity. Instead, it is more likely that the opposite will occur. If, as planned by the government, overtime is incentivized through tax breaks, individual hourly productivity is likely to decline and the risk of workplace accidents could even increase, which would be detrimental to the development of labor productivity. From his perspective, extending working hours cannot permanently increase economic growth.
Merz had called on the Germans to step up in this week, stating, “We must work more and more efficiently in this country.” He added, “We will not be able to maintain the prosperity of this country with a four-day week and Work-Life-Balance.” Michael Hüther, director of the Institute for Economic Research (IW Cologne), also argued for the elimination of one public holiday, stating, “The abolition of a public holiday would be a way to increase economic output quickly and effectively.”
However, Herzog-Stein suggested expanding investments in tangible and human capital. He sees positive prospects for significant impacts through the public sector’s special fund of 500 billion euros. Regarding human capital investments, he believes that more efforts need to be made, as too many young people in Germany are without an educational qualification. He believes that if this can be changed sustainably, it will positively impact the overall economic development of labor productivity.