A dispute has emerged between the German Trade Union Confederation (DGB) and the employers’ association over the government’s plan to incentivize early retirement and simultaneously subsidize the continued employment of pensioners.
DGB’s Vice-Chair, Anja Piel, criticized the plan, stating that it is economically nonsensical to encourage early retirement and at the same time subsidize the continued employment of pensioners. “If employers are calling for incentives for longer working and complaining about the shortage of skilled workers, they must ask themselves how it is possible that many of them are currently using early retirement programs to opt out of responsibility” Piel said, referencing the current layoffs in many companies.
The head of the Federation of German Employers’ Associations, Steffen Kampeter, acknowledged that layoffs can be unavoidable. However, he emphasized that when the economy recovers, it will be challenging to find experienced and well-trained skilled workers. Therefore, the DGB’s proposal for a tax-free early retirement should be abolished, as it is a costly and misguided approach that puts additional pressure on the labor market, Kampeter said.
The planned “Activ-Rent” – which would allow pensioners to earn up to €2,000 a month tax-free after reaching the standard retirement age – can only be effective if the early retirement incentives are abolished, Kampeter argued. Otherwise, the pension policy would be contradictory, as it would be like stepping on the gas and the brake at the same time.