Employer States: "There's a need for increased effort and extended hours"
In a recent interview with the Frankfurter Allgemeine Zeitung, Economy Minister Katherine Reiche called for longer working hours and an extended working life in Germany to cope with demographic and financial challenges facing the pension system.
Reiche's comments suggest that the current system of wage-related contributions, taxes, and levies in Germany is a factor in the uncompetitiveness of the factor of work. She emphasized the need to "work harder and longer" to keep the pension system sustainable, stating that "lifetime working must rise."
Reiche highlighted that some workers have physically arduous jobs, but many others could work longer and want to. She used international comparisons showing Germans work fewer hours annually (about 1,340) than Americans (1,800 hours), arguing Germany needs to increase working hours.
However, Reiche's call for longer working hours and raising the retirement age has faced strong criticism from worker representatives, including the German Trade Union Confederation (DGB). The DGB argues that to ensure good pensions, more money needs to come from the income side (more contributions) rather than increasing working life or retirement age.
Christian Bäumler, a workers association leader from Reiche's own party, criticized her lack of awareness about Germany’s high part-time working ratio, which results in a low average annual working time. He questioned her suitability as Economy Minister given this ignorance.
The DGB also emphasized that social tasks benefiting society (e.g., pensions for mothers) should be paid out of tax revenue, not pension funds.
SoVD chairwoman Michaela Engelmeier suggests that an employment insurance that includes civil servants and members of parliament can stabilize the pension system.
Reiche's statements indicate a concern about the long-term sustainability of the social security systems in Germany. She expressed her view that what is in the coalition agreement on reforms will not be enough in the long run to address the issues in the pension system.
In related news, pensions will see moderate increases in 2025, and there are related changes like increased long-term care insurance contributions for pensioners.
Despite the criticism, Reiche remains steadfast in her belief that increasing the working life duration and retirement age is necessary to ensure the financial sustainability of the pension system in Germany.
- The debate on the sustainability of the pension system in Germany extends beyond Economy Minister Katherine Reiche's proposals to increased working hours and retirement age, as concerns about the financial implications of such changes in the business sector and politics are prominent.
- The discussion on the German pension system also encompasses the general-news arena, with various proposals surfacing to address the system's long-term sustainability, such as Christian Bäumler's suggestion of an employment insurance that includes civil servants and members of parliament.
