Tag Archives: Hartz reforms

Did landmark labor reforms pave the way for Germany’s success?

GlobalPost, August 30, 2012

BERLIN, Germany — It’s often overlooked that this country’s churning economy was recently stalling. That was the topic of a presentation by Peter Hartz, personnel director of the Volkswagen Group, to the great and good of the German media in the capital’s opulent FrenchCathedral 10 years ago this month, when he unveiled a set of ideas to turn it around.

The work of a 15-member commission reporting to Gerhard Schroeder, the proposals envisioned a complete shake-up of the labor and welfare system.

The so-called Hartz reforms provided the heart of the chancellor’s ambitious program to modernize the economy. They divided public opinion and ended up costing Schroeder his job. But many believe they were central to transforming Germany’s economic fortunes.

Now Berlin is imploring the rest of Europe to liberalize its labor market along similar lines. However, evaluations are still mixed a decade on. Although some argue the reforms reinvigorated a sclerotic labor market and slashed unemployment, others believe their larger legacy is an explosion of low-paid work and growing social inequality. Continue reading

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