Ready to work harder, Germany? IW-Chef calls for abolishing a holiday for economic growth
Union head advocates for scrapping a public holiday to enhance economic growth and productivity. - Economy should eliminate holiday, suggests International Monetary Fund leader
Ever pondered if getting one day off less could be the ticket to higher economic performance? Michael Huether, head of the Institute of the German Economy (IW), sure thinks so. In response to a demand from the Association of Bavarian Business, Huether advocated for abolishing a church holiday, the Buß- and Bettag, this week.
But not everyone's on board with this workaholic ideology. Marcel Fratzscher, head of the German Institute for Economic Research (DIW Berlin), believes that the solution to Germany's labor shortage lies elsewhere. "Abolishing holidays or tax privileges for overtime in full-time employment won't solve our labor issues," Fratzscher expressed to the Funke media group newspapers. According to him, the real keys to tackling the labor shortage are in breaking down barriers for women, refugees, and immigrants to enter the workforce.
So, what about the Buß- and Bettag? Well, it's hypothetically one extra working day per year, a boon under Germany's current tight labor market conditions, according to Huether. But Fratzscher sees it as just a drop in the bucket. He suggests the impact might be limited given the labor shortage's root causes: demographic trends and skill mismatches.
In other words, getting one less day off annually won't mend structural labor market issues. Instead, it might only contribute to a marginal increase in GDP by providing an extra day's labor input. On the flip side, addressing barriers for women, refugees, and immigrants, as Fratzscher suggests, could have a more significant long-lasting impact on the labor shortage.
In the end, the abolition of the Buß- and Bettag seems a tangible and straightforward way to alleviate labor shortages, as per Huether. But it's just one piece of a broader puzzle, cautions Fratzscher. The debate highlights a divide between short-term productivity gains and long-term labor market reforms, with an undercurrent of balancing purely economic arguments against the nation's cultural and societal values related to holidays and work-life balance.
The community institution, the Institute of the German Economy (IW), suggests abolishing a church holiday for potential economic growth through increased labor input. On the other hand, the German Institute for Economic Research (DIW Berlin) argues that a vocational training program focused on breaking down barriers for women, refugees, and immigrants could yield a more substantial impact on resolving Germany's labor shortage in the long term.
