Ten years on: Schröder labor reform gains support | Business| Economy and finance news from a German perspective | DW | 16.08.2012
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Ten years on: Schröder labor reform gains support

A decade ago, an advisor to the German government presented the biggest labor market reform package since the end of World War II. Once a thorn in the side for many, the reforms are now seen in a more positive light.

Former German Social Democrat Chancellor Gerhard Schröder said on Thursday the country's most far-reaching labor reforms initiated 10 years ago were a blessing for society at large.

"Unemployment has gone down by two million people since we started implementing the reforms," Schröder told the mass circulation newspaper Bild.

Ten years ago, a former Volkswagen manager and advisor to the government, Peter Hartz, presented a labor market reform which involved cuts in unemployment benefits for the long-term jobless and stricter rules for unemployed people to accept jobs offered by a reformed system of employment agencies across the country.

The package also allowed for a more flexible employment of temporary workers which helped Germany ride out the peak of the global financial crisis in 2008 and 2009.

More social tension?

Schröder argued the welfare reforms had been very painful in the beginning. "But looking at the results, they were definitely worth tackling," he added.

Former Social Democrat Chairman Franz Müntefering also defended the reforms as a step in the right direction.

"All in all, it was a package worth implementing, although it had its shortcomings, too," he argued, alluding to increasing calls for a minimum wage in all industries and better wage deals for temporary workers.

Germany's opposition Left party for its part called for a complete overhaul of the welfare reform known in Germany as "Hartz IV" after the man who conceived it. It claimed that its rigid implementation had led to more social injustice and polarization in the country.

hg/mz (AFP, dpa, dapd)

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