Economic Policy for Full Employment: Proposals for Germany

Abstract

Since the mid-1970s, Germany has suffered high unemployment levels. In 1996, there was a shortfall of 6-7 million jobs. Unemployment, which means a loss of production, and is the main cause of poverty and the fiscal crisis, has been exacerbated by reunification and by recent corporate and government strategy. This subordinates all social goals to that of international competitiveness, with downsizing and unemployment used to hold down workers' wages, social benefits, rights and aspirations. The article argues that any alternative economic policy for full employment, more social security, ecological sustainability and economic democracy must, therefore, be based on large-scale public investment, an expanded public sector, reduced working hours and a targeted labour market policy. This would be mostly self-financing and could be defended against a hostile economic environment but would require major changes in the distribution of income and power. The Maastricht Treaty presents new but not insurmountable obstacles.