Tuesday

The German employment miracle

Germany used to have worse unemployment than Britain. Now it has better. Youth unemployment has fallen to 8% – half the level it was in 2005. And this despite the Eurozone crisis. Something happened in Germany. What was it?

Elizabeth Truss M.P. has written a paper describing what she thinks have been the crucial changes. Here are two of them:

- new forms of ‘mini’ and ‘midi’ jobs which involve relatively small deductions from pay and are simple for the employer to administer. They reduce the ‘wedge’ between what a person receives and what an employer pays out. You can take a mini-job in addition to a regular job.

- businesses of under 10 employees can sack employees without the risk of being taken to a court on the basis of ‘unfair dismissal’. Previously the limit was 5 employees.

The full text of her paper is here: http://www.freeenterprise.org.uk/sites/freeenterprise.drupalgardens.com/files/Learning%20lessons%20from%20Germany.pdf

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