In a new paper released today, A Decade of Gains – Learning Lessons from Germany, Elizabeth Truss MP argues that if Britain wants to address unemployment we need to make it easier for companies to implement flexible employment practices and encourage boosting skills.
Britain has much to learn from Germany, especially on jobs and skills.
For example;
- Germany now has the lowest rate of unemployment in Europe with youth unemployment at 8 per cent, down from 16 per cent in 2005.
- In 1997, Britain’s labour market was considerably less regulated than Germany’s and unemployment was lower. Now Germany is catching up and in some cases (exemptions for small businesses) has overtaken Britain.
- Germany’s flexible workforce has increased with the advent of “mini” and “midi” jobs for low-waged work, with tax paid at a fixed rate outside of the normally onerous social security system. Workers on any income can take on one of these jobs paying a low flat rate of tax. Temporary work now accounts for two thirds of new hires.
- German small businesses are exempt from various regulations including unfair dismissal. The UK Government should implement similar proposals.
- Parental leave in Germany has been made more flexible and is paid to the employee directly by the Government. Childcare is more affordable costing parents 11 per cent of their income compared to 27 per cent in the UK. Female participation rose by 10 per cent in the last decade.
- German education reforms are now delivering real skills improvements. In 2000 the UK was ranked 12 places ahead of Germany in mathematics. By 2009 the UK was 12 places behind. Germany’s reforms have focused on strong accountability, core academic subjects and a longer school day