Beschäftigung für Arbeitskräfte mit geringer Produktivität / Employment of Workers with Low Productivity: Ein Beitrag zum Umbau des Sozialstaats / A Contribution to a Reconstruction of the Welfare State

Abstract

In Germany, the number of low-wage jobs is relatively small. The paper examines why this is so and which institutional reforms of the welfare state could help to expand the labour demand for low-wage work to give persons with a relatively low productivity a better chance to reintegrate into the labour market. The author proposes a reform of the German welfare state: away from granting unconditional unemployment and social aid towards providing aid for reemployment. The main elements of the reform are (i) subsidies to low-wage employment to foster a genuine market for labour with low productivity and (ii) setting a high priority by the relevant social and employment agencies on re-integration aims. The author extensively discusses a number of potential arguments against his reform proposal.