And where do the jobs come from? Critical comments on the proposals of the Hartz Commission

This article, too, focuses on the proposals of the Hartz Commission. The Commission’s major proposals, insofar they are known ahead of time, are being scrutinised with respect to their usefulness in bringing about the urgent turnaround in the labour market. Compared to earlier concepts for reducing unemployment, the proposal contains several interesting ideas: more effective job placement with one-stop service to the unemployed, the use of loan employment, a review of the present practice of assigning reasonable job offers and the present package of successive wage replacement services. These approaches must be integrated into a comprehensive concept, however. And this has not been done in the Hartz paper, at least not in its preliminary version. A significant gap of the concept is that it hardly looks at possibilities to influence the demand for labour, i.e. the number of jobs to be filled. Thus the question about the level and structure of wages is ignored as is the question about the role played by various kinds of labour market regulation which have the consequence that in Germany the input of labour is only profitable under conditions of productivity and flexibility that cannot be met by too many workers. The question about the role of welfare services as a binding wage floor is left out. As long as these questions are not discussed openly, a successful reform of the German labour market is still miles away