In late September 2001, the German government presented a draft bill on the reform of labour market policy, which was discussed in parliament in October. Key elements of the reform include: improved assessment of the needs of individuals in order to perform successfully in the labour market; better job placement; immediate access for unemployed people to various employment policy measures, and improved linkage between labour market policy measures and other policy areas. In addition, importance is attached in the reform to the promotion of women's employment and gender mainstreaming. The social partners have given a broad welcome to the proposals, though with a number of criticisms.
On 24 September 2001, the federal government presented a draft bill entitled Job-AQTIV-Gesetz on the reform of labour market policy, which was discussed in parliament (Bundestag) on 15 October 2001.
The draft bill aims to improve the existing provisions on the promotion of employment within the Social Security Code (Sozialgesetzbuch, SGB III), which are not seen as sufficient to reduce unemployment and to prevent the development of new unemployment. In particular, there are currently disadvantages for people who have to give up employment because of total disability, who interrupt their work or their benefit entitlements because of childbirth or having to care for a child, or who experience a break in receiving social support such as unemployment benefits and unemployment assistance. This group of people is insufficiently covered by the current employment promotion measures. The existing law also restricts the opportunities for registered unemployed people to work in a voluntary capacity.
Through the reform, the government aims to improve the efficiency of employment services, strengthen qualification and skilling processes and allow a better reconciliation of work and family life. The catchphrase of the reform is that labour market policy will be based on the principle of 'promoting and demanding' ('Fördern und Fordern').
In concrete terms, the reform aims to
A key element of the reform is the introduction of an 'integration agreement' (Eingliederungsvereinbarung) between unemployed people and public employment offices. On the one hand, this aims to guarantee that employment offices make offers of jobs and labour market measures which are not only suited to the individual interests, knowledge and abilities of the unemployed person, but also correspond with gender-specific employment opportunities, as far as the labour market allows this. On the other hand, each unemployed person is obliged to make efforts to find a job and to participate in employment policy measures. To achieve the observance of the agreement by the unemployed person, the existing regulations on freezing payments in cases where the person is not making an effort to find a job (Sperrzeiten) are to be intensified: unemployed people who do not immediately arrange an interview when a potential employer has been identified, miss an agreed appointment or show no interest in taking on a job during the interview, will have their unemployment benefits stopped for a period of 12 weeks.
Another important point of the reform is that opportunities to integrate unemployed workers into work through temporary work agencies will be increased. Therefore, the period of employment of temporary agency workers with the same employer (Überlassungsdauer) can be extended if it is not expected that the person concerned will take on another form of employment soon. In addition, 'job rotation' is to be introduced. This is a measure whereby wage costs subsidies are provided to employ an unemployed person as a temporary substitute for an employee released from work to undergo further training
Finally, with regard to structural measures, the draft bill expands the entitlement to short-term working subsidies for companies in a structural crisis to companies with fewer than 21 employees. This support was previously restricted to larger companies.
In a press release), the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) expressed overall support for the reform, arguing that it contains elements which might help to address the high level of long-term unemployment and fill the gaps in the social security system. The proposals to offer more suitable job placements to unemployed people and to improve the qualification levels of older employees and lower-skilled workers, as well as the extension of social security cover for people with caring obligations and the introduction of job rotation, were especially greeted by DGB. Nevertheless, DGB wants the government to improve the situation of people receiving social welfare, as they need more support in finding a job. According to DGB, these people should also be included in labour policy measures.
In a press release, the president of the Confederation of German Employers' Associations (Bundesvereinigung Deutscher Arbeitgeberverbände, BDA), Dieter Hundt, expressed the opinion that the new regulation was overdue and a good beginning for a new orientation of the SGB III. Nevertheless, he stated that the reform is not far-reaching enough. According to BDA, the possibilities of penalising unemployed people who do not fulfil their obligations should be extended, and the allowed period of temporary agency work should be extended to a minimum of 36 months. BDA also claims that several parts of the reform are too expensive and will lead to higher social insurance contributions and thereby higher labour costs, which are already at a high level in Germany. Consequently, BDA rejects, for example, the ideas of publicly-financed qualification and employment measures and the inclusion of time off for childcare in the social security system. Furthermore, the increase in childcare subsidies for women involved in labour policy measures would, it is claimed, discriminate against working women, who do not receive extra money for childcare.
Several women's groups and organisations - such as the 'Equality Group' (which aims to promote the inclusion of women's interests in the national tripartite Alliance for Jobs - DE0012298F) and the Federal Organisation for Occupational Perspectives for Women (Bundesarbeitsgemeinschaft Berufliche Perspektiven für Frauen eV) - take a positive view of the gender mainstreaming and the promotion of women's employment within the reform, although they believe that some aspects need to be improved. The fact that women are to be included in labour market measures in proportion to their unemployment rate is seen as a particular problem, as this might have negative effects for women in west Germany, where the percentage of women in small-scale 'marginal time' employment, rather than full unemployment, is very high. This means that the employment rate of women is artificially high and their unemployment rate artificially low. In addition, it is claimed that there is a high percentage of women in the 'hidden reserves' (Stille Reserve) of labour, who are not included in the labour market statistics. Women's groups fear that the new approach will strengthen imbalances on the labour market, and propose instead that women's employment be promoted according to their share of the number of unemployed persons.
Women's groups also criticise the fact that the inclusion of people with childcare responsibilities in the social security system will apply only to women who were already in employment when the legal employment protection for expectant and nursing mothers was introduced. This this puts at a disadvantage women who were not employed at this point. In addition, women's groups demand that time off for the care of elderly people should also be included in the social security system, as this is also mostly work carried out by women.
The high number of unemployed people in Germany is reason enough for active labour market policy to be improved in order to prevent long-term unemployment and bring people back into employment fast. In summer 2001, there were about 3.7 million people unemployed in Germany, an unemployment rate of 9.9%. The differences between west and east Germany are still very high: while the unemployment rate was 7.9% in the west, it was 18.1% in the east. There is no difference between the unemployment rates of men and women, but it should be borne in mind that fewer women than men are employed.
Therefore the new principles proposed by the government - and especially that public employment offices must take into account the individual interests, knowledge and abilities of the unemployed person before they propose participation in labour policy measures or jobs - must be seen as a progress. However, as indicated by the criticisms of some women's organisations concerning the promotion of women's employment, some aspects of the reform might need further discussion. In addition, the high level of unemployment makes it obvious that even the best reform will not solve the labour market's problems. There is a lack of job vacancies in general, and those jobs which are vacant do not fit the qualifications of unemployed people or regional differences and preferences. (Alexandra Scheele, Institute for Economic and Social Research, WSI)