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08/31/2009

The number of unemployed in Germany could put a major dent in the shiny, new economic recovery that the European Union's biggest economy is currently driving. While some analysts predict that unemployment must rise -- economist Wolfgang Franz told Die Welt newspaper on Monday that he expected figures to rise to 4.4 million in 2010 -- Olaf Scholz, the minister of labor and social affairs, does not agree. The Social Democrat believes the jobless tally will stay under 4 million. He notes that opting for shorter work weeks has already saved hundreds of thousands of jobs, and he is sure that those already working fewer hours are not in danger of losing their jobs after the federal elections.

In a SPIEGEL interview, Scholz discussed the effects of the global downturn on the labor market and how he plans to ensure that the next generation of Germans are successful in landing good jobs.

SPIEGEL: Mr. Scholz, experts predict that the economic crisis will begin to have an impact on the labor market in autumn. What are you expecting?

Scholz: Up until now, the experts have not been particularly accurate with their predictions. They have not considered how effective our Kurzarbeit program of reduced work hours is. We have rescued several hundred thousand jobs with this program. (Eds: Under the program, companies can reduce employees' working hours from full to part-time and the federal government subsidizes the difference in workers' salaries and covers their benefits.) Of course the economic crisis is going to see unemployment figures go up. But we will stay under the 4 million mark this year.

SPIEGEL: Employers are thinking of the federal elections. And when the new administration is in power later this year, after the vote on Sept. 27, a wave of layoffs might come then.

Scholz: That's rubbish. I regularly speak with the heads of human resources and the workers' councils of the most important companies. I definitely do not get the impression that those working reduced hours today will be the redundancies of tomorrow. On the contrary: Many companies have come to the conclusion that they are going to face a grim shortage of qualified labor in the next few years. In the next two decades there is going to be a shortage of qualified workers in every area. And basically that will be the big issue during the next term of office.

SPIEGEL: Every party says this -- but most of them do very little about it. What is your plan?

Scholz: The German government has two tasks. Firstly they must encourage more young people to study for longer, particularly in the areas of mathematics, engineering and science. And secondly, they must make sure that no young person is entering the workforce without some sort of apprenticeship or vocational training behind them.

SPIEGEL: What are you suggesting?

Scholz: Every year thousands of school leavers just drop off our radar. Some drop out and live off whatever work comes their way. Others finish their education but they never show up in any of our statistics. We don't know what happens to them. We should know what sort of paths these school leavers pursue.

SPIEGEL: That sounds a little bit like Big Brother, the all-seeing state. Do you want to start some kind of central data bank for everyone aged between 16 and 20?

Scholz: No. We don't want to watch them, we just want to be there to help when they need help. Say a 16-year-old leaves school. Maybe the next time we see them again is when they are 22, unqualified and lining up (unemployed) at the job center. Starting your working life is an important step on life's journey. We cannot just leave people helpless and alone. And to get this happening, right across Germany, is my goal for the next term.

SPIEGEL: In Germany, education tends to be regulated at the state level.

Scholz: Of course we will have to act together with the states. There are actually already some good examples where it is working. In North Rhine-Westphalia, for instance, there is the so-called vocational guidance project -- and it's getting good reactions. We need this sort of thing happening in all of Germany.

SPIEGEL: But in reality, aren't you impinging on people's basic freedoms? Isn't a field of occupation something individuals should be deciding for themselves?

Scholz: That won't change. But we can't just look the other way. One-and-a-half million people aged between 20 and 29 don't have any sort of vocational training. Fifteen percent of this group will never have any kind of qualification. We could keep trying to fool ourselves about the state of the nation. But this is a big drama. The number of jobs for those without qualifications continues to fall and we have to deal with this. And quickly too.

SPIEGEL: But surely education is a problem for the education system, not the Ministry of Labor.

Scholz: I believe that 60,000 young people leaving school every year without graduating isn't just an act of nature. It's a failure of the state. Of course we need better schools and kindergartens. But as a responsible politician I can't just stand by and say I'm not responsible for the consequences. Around 500,000 of the unemployed don't have any school leaving qualifications. Even those who leave school at 16 still have five decades in the labor force ahead of them. And those who leave without any qualifications always end up as a client of the labor minister.

SPIEGEL: There is a growing number of politicians in Germany who would say that if the requirements of the modern labor market can't be met by all candidates, then we need to give up the goal of full employment. We could simply pay everyone a basic income and solve the problem that way. What do you think of that?

Scholz: I totally disagree. For one thing, that doesn't solve the problem, because poverty is on a relative scale. If everyone just gets €600 ($858) they will still compare themselves to their neighbors, who are still earning money. They won't be satisfied. As a Social Democrat I have a slightly different opinion. I am of the opinion that people should work and that they have the right to work -- and in that I differentiate myself from the conservatives and (the Free Democrats).