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The German Precariat and the Role of Fundamental Security - Is the Unconditional Basic Income a Possible Solution for the Growing Precarity in Germany?

Author

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  • Bernard Michael Gilroy

    (Paderborn University)

  • Julia Günthner

    (Paderborn University)

Abstract

The international business competition fostered new forms of flexible working and atypical employment. The flexibilization process started during the 1970s and continues to change the labor market and the perception of labor to the present day. As a result, a new class, called the precariat, is establishing which can be characterized by insecure employment and living. Precarity resulting from fixed-term, short-term, part-time or temporary employment can concern everyone and has negative consequences on society, economy and health. In parallel to the development of precarity, a possibility of basic security in the form of the Unconditional Basic Income (UBI) is discussed globally. However, the particular situation in Germany, regarding the precariat and the UBI as a possible solution has not been outlined yet. Although, UBI implementation models have been proposed for Germany, there is no analysis in the current literature that would show the effect of the UBI on the German precariat. Applying a modern macroeconomic analysis within the scope of the jobless growth argument, the paper investigates the effect of an UBI on goods demand, economic growth, employment level and consequently, the precariat. The paper shows that an implemented UBI as well as labor-related security increase economic growth and can reduce the German precariat. Politicians and employers should be aware of this positive aspect of the UBI and implement policies to reduce labor-related insecurities in order to decrease the growing precarity.

Suggested Citation

  • Bernard Michael Gilroy & Julia Günthner, 2017. "The German Precariat and the Role of Fundamental Security - Is the Unconditional Basic Income a Possible Solution for the Growing Precarity in Germany?," Working Papers CIE 109, Paderborn University, CIE Center for International Economics.
    • Handle: RePEc:pdn:ciepap:109
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    More about this item

    Keywords

    Precariat; atypical employment; flexibility; basic income; jobless growth; AS; AD;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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