Opinion – New world of work: unease remains over German labour reforms – FT.com

This is an excellent subjective insight into Germany‘s labour practices since unification, published in the FT. It’s a must-read. Check it out!

via New world of work: unease remains over German labour reforms – FT.com.

Personally, I’m not sure if Germany’s ‘mini-jobbers’ are any different from their UK equivalents on ‘zero hours contracts’?

Germany believes that German practice is a good model for the rest of Europe, especially Southern Europe, where rigidities in the labor market are responsible for poor competitivity  and negative jobs growth.

Of course, if you speak to a long-term unemployed man in France, he will have a very different perspective. He will probably speak angrily about ‘Le Scam’. It seems that in France, the long-term unemployed are faced with questionable jobs, whereby the likes of branded fast food chains, post a rate per hour but expect much more. The unemployed must, of course, go for interviews in France to preserve their unemployment benefit.

With increasing globalization and spread of neoliberalism from the likes of the International Monetary Fund, we have Anglo-Saxon, especially North American, labor practices becoming more prevalent in Europe – the new European ‘gold standard’ is the ‘mini-jobber’.

Of course, if you are a potential employee, the perspective is reversed and you will hang on to your union protection and prevailing legal protection. There’s a world of difference between permanent jobs with protection, and the world of zero hours or mini-jobbers. Even in traditional jobs, final salary pensions are becoming a rarity, unless you work in the public sector. There’s still enormous protection in the public sector but with savage austerity, it’s not quite as cosy as it used to be, certainly not in the UK and many countries in Southern Europe.

The trends are clear. Because of technology and open markets, there will be fewer and fewer jobs, especially for those without professions or highly specialized skills. Even for the most qualified, the competition will become more and more intense. Also immigrants will be ready to undercut the locals, turning up the pressure.

Lucky you if you are fortunate enough to get started on a conventional career, but the chances are that it will be prematurely curtailed, leaving you high and dry.

It’s time to take control. On this blog, John Gelmini and I have repeatedly advised people to re-skill, de-risk and look at alternative options.


Inequality Is The Defining Issue Of Our Time – Barack Obama – Social Europe Journal

English: Barack Obama delivers a speech at the...

English: Barack Obama delivers a speech at the University of Southern California (Video of the speech) (Photo credit: Wikipedia)

This transcript of President Obama’s speach published in the Social Europe Journal is a MUST READ. Check it out!

via Inequality Is The Defining Issue Of Our Time – Social Europe Journal.

As usual there are fine words from President Obama but the acid test is that inequality has increased significantly on his watch.

If you interested in other recent important articles on inequality see an excellent blog from Paul Krugman and his followed up, both  published in the NYT. For another perspective, see the viewpoint of Oxford economist, Simon Wren-Lewis; Wren-Lewis’s blog examines inequality in the UK.

For convenience, let me restate my views on Wren-Lewis’ article:

Whilst I recognize the thrust of Wren-Lewis’ argument, I disagree that the right wing are necessarily painting poverty as laziness.

Surely, the less fortunate are suffering from having the wrong skills in an increasingly globalized labor market? Most public and private sector organizations have endeavored to simplify their product or service offering – this has led to widespread outsourcing and off-shoring. Along with technological improvements, there is just not the same need for unskilled or semi-skilled jobs.

On the other hand, I strongly endorse Wren-Lewis’ views that UK austerity has been excessive. Recent statistics have shown that investment, both in the public and private sectors in the UK, has collapsed in 2013 – this is because George Osborne did not provide the fiscal incentives. Stimulating inflation in private property with government guarantees is a poor substitute for real investment.

Large swathes of the unemployed are effectively unemployable. One solution is to create more jobs, with investment in infrastructure etc. BUT in the main,  the problem is to do with a mismatch of available labour and demand from business. The skills mismatch is often the reason that highly-skilled immigrants get the UK’s available jobs.

Whether it’s a left or right-wing UK government, there are some clear things that are required.

The UK Government needs to take a hard, strategic look at UK competitiveness, identifying sectors for growth and sectors for slow withdrawal. The growth sectors should be encouraged to invest for growth and exports. Most importantly, there should be a clear strategy to increase the UK labour market‘s skill-set to meet growth sectors. Sectors that are effectively the “dogs”, like UK healthcare, need to be heavily transformed based on global best-practice. Jobs in the “dogs” industries need serious attention to increase productivity or be replaced by outsourcing, offshoring or mechanization.

Similarly, a strategic review is required of the indigenous labour market, analyzing age, skills, location, potential for relocation (including offshore) – two important sectors that need urgent attention are the millennials and the baby-boomers.

Finally, if you are interested in a response to my own recommendations above, see John Gelmini’s proposed policy recommendations for the UK.

Any thoughts?

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