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Labor and Income

The labor market situation of recent years shows: High employment and low unemployment are possible with the right policies and in a flourishing economy.

About the topic

The German labor market has been in a state of flux in recent years: Due to structural change and digitization, jobs have been lost in some sectors, for example in mining or industry, but at the same time many new jobs have been created in the digital world of work. However, despite recent successes, millions of people are still looking for a job, although skilled workers are becoming scarce as a result of demographic change. Going forward, therefore, the goal remains to increase labor force participation, promote occupational mobility, make it easier for people to get into jobs, and keep the shortage of skilled workers at bay for the economy.

Meanwhile, the demands on employees are changing rapidly. Digitalization and internationalization are shaping the world of work. Aging and heterogeneous workforces pose difficult tasks for HR policy. Companies are well equipped if they succeed in balancing the different requirements.

Employees' earnings, i.e. wages and salaries, can be freely negotiated with their employers - in some cases, the leeway is limited by collective agreements. Wage policy also determines how many skilled workers employers can retain. Overall, wages have risen steadily over the past few years, which has led to an increase in prosperity.

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An Analysis of Demographic Structures in the 27 EU Countries
Wido Geis-Thöne IW-Report No. 38 14. October 2021

Working Age Populations Develop Differently in Europe

If Germany does not succeed in attracting immigrants on a large scale in the next few years, the working-age population will decline sharply. According to the European population projection EUROPOP from 2019, the number of 20–64-year-olds could be 11.2 percent lower in 2030 than in 2020, if there would be no migration. In this case, a decline of only 6.9 percent would ...

IW

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A critique of the EU Commission's proposal for a directive on adequate minimum wages
Christoph Schröder IW-Policy Paper No. 25 8. October 2021

Do we need a European minimum wage?

In many countries, a paradigm shift in minimum wage policy is discussed, or it has been implemented already. Instead of protecting employees from exploitation as a lower safety line, the minimum wage is intended to provide an adequate standard of living - if ...

IW

Read the article
Significant progress in labor market integration despite pandemic
Wido Geis-Thöne IW-Report No. 31 30. August 2021

Significant progress in labor market integration despite pandemic

The first lockdown in spring 2020 had a negative impact on the labor market integration of refugees in Germany.

IW

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Employment plans of the companies 2021
Holger Schäfer / Oliver Stettes IW-Report No. 29 12. August 2021

Employment plans of the companies 2021

For 2021 compared to the previous year, more firms expect an increase in their demand for labor than a decrease.

IW

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An Analysis of Demographic Structures in the 27 EU Countries
IW-Report No. 38 14. October 2021

Working Age Populations Develop Differently in Europe

Wido Geis-Thöne

If Germany does not succeed in attracting immigrants on a large scale in the next few years, the working-age population will decline sharply. According to the European population projection EUROPOP from 2019, the number of 20–64-year-olds could be 11.2 percent lower in 2030 than in 2020, if there would be no migration. In this case, a decline of only 6.9 percent would be expected in the EU average, and only Lithuania would show a more negative development.

IW

Read study
A critique of the EU Commission's proposal for a directive on adequate minimum wages
IW-Policy Paper No. 25 8. October 2021

Do we need a European minimum wage?

Christoph Schröder

In many countries, a paradigm shift in minimum wage policy is discussed, or it has been implemented already. Instead of protecting employees from exploitation as a lower safety line, the minimum wage is intended to provide an adequate standard of living - if possible without government intervention.

IW

Read study
Acceptance of Parliamentary Procedures in the Light of Individual Problem Perception
IW-Trends No. 3 15. September 2021

Acceptance of Parliamentary Procedures in the Light of Individual Problem Perception

Matthias Diermeier / Judith Niehues

A lively democracy thrives on the struggle between different interest groups for majority opinion on specific issues. Though the institutionalised process of balancing interests and hearing opposing points of view takes time, acceptance of these parliamentary procedures is essential for the functioning of our pluralistic democracy.

IW

Read study
Significant progress in labor market integration despite pandemic
IW-Report No. 31 30. August 2021

Significant progress in labor market integration despite pandemic

Wido Geis-Thöne

The first lockdown in spring 2020 had a negative impact on the labor market integration of refugees in Germany.

IW

Read study
Employment plans of the companies 2021
IW-Report No. 29 12. August 2021

Employment plans of the companies 2021

Holger Schäfer / Oliver Stettes

For 2021 compared to the previous year, more firms expect an increase in their demand for labor than a decrease.

IW

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