The Bremen study group on Alternative Economic Policy has been publishing analyses since 1975. Sustainable infrastructure Investments, de-carbonization, environmental safeguards, work protections and welfare regulations are primary as well as resisting profit maximization and environmental destruction.
MEMORANDUM 2023
Globalization at an end -
Time for alternatives
EXECUTIVE SUMMARY
Table of contents
1. robust economy in Germany
2 State compensates for market failure
3 Active labor policy in times of segmented labor markets
4 Globalization in the crisis
5 Fossil fuels at the end - time for alternatives
6 Blind spots in climate policy: sufficiency and climate-friendly living
7 There is another way - pensions in Austria
8 Concluding remarks
MEMORANDUM 2023
Globalization at an end - Time for alternatives
by The Alternative Economic Policy Study Group in Bremen, Germany
[This memorandum posted in February 2023 is translated abridged by Marc Batko (marc1seed@yahoo.com)
from the German on the Internet, http://www.alternative-wirtschaftspolitik.de.]
1
We are living in a time of multiple crises. The corona pandemic, the ongoing environmental disaster, wars and escalating geopolitical conflicts are keeping the world on tenterhooks. Above all, the Russian war against Ukraine is having devastating devastating consequences. However, it has also provided the impetus to far-reaching and in some cases reciprocal economic sanctions, which have shaken up the global energy and raw materials markets.
The return of inflation that began with the corona crisis accelerated enormously. At the same time, the war has triggered a new wave of rearmament, which threatens to divert the necessary concentration of all economic and social forces on the fight against climate change into the background.
No one can seriously assess what escalation of this war with more and more weapons will lead to and what economic turmoil will be provoked. "I fear that the world is not sleepwalking into a major war - I fear it is doing so with its eyes wide open" (UN Secretary-General António Guterres before the UN General Assembly on 2/6/2023).
War causes endless human suffering and economic damage. How can the war against Ukraine be ended as quickly as possible while respecting its sovereignty and the principles of principles of international law? It is important to keep the door open to consistent strategies at all times concerning this war and the associated trade disputes, not only during this war, but also far beyond the war. The world is more dependent on cooperation than ever. Otherwise the ecological catastrophe cannot be stopped. There is no other way to overcome the ever-greater polarization between rich and poor.
A world whose global inter-dependencies threaten to sink into crises, chaotic processes and power struggles between countries and regions. Only through cooperation can rules be imposed on global capitalist exploitation enabling all people to live in dignity.
Thinking beyond war also means preventing long-term economic damage. The most obvious economic consequence of war and sanctions is the damage caused by the scarcity of raw materials, especially energy resources, and the price rise in many countries. According to calculations by the International Monetary Fund (IMF, World Economic Outlook, January 2023), the inflation rate in 2022 in industrialized countries was 7.3 percent and 9.9 percent in the countries of the global South. In Germany it was 7.9 percent. The central banks are fighting inflation with rising interest rates, but cannot change the causes of price increases.
The current situation is creating winners and losers -even if the situation is surprisingly stable and a global economic crisis is not in sight (the IMF puts the real increase in global gross domestic product (GDP) in 2022 at 3.4 percent in 2022). Many multinational corporations are benefiting from the crisis, the shortage of raw materials and rising prices. Oxfam
(Rethinking for social justice, January 2023) has analyzed 95 of the largest food and energy companies and found that they will increase their profits in 2022 by 256 percent compared to previous years. That means a profit of 306 billion US dollars. This sum was largely not invested; 84 percent of it was distributed to shareholders (Handelsblatt from 2/1/2023). The energy company Shell posted a new record profit of 39.9 billion US dollars, doubling its result from
the previous year. Here, too, the money was not reinvested. Shell distributed a total of 26 billion dollars in 2022 and bought its own shares for 19 billion dollars. The excess profits actually due in the UK, the location of Shell's headquarters, were trifling. Through clever tricks, Shell managed to limit the payment of the special tax to 900 million dollars (Handelsblatt from 03.02.2023). This shows once again how difficult it is to obligate internationally active
corporations with national tax legislation.
In the USA, there is once again debate about the role of multinational corporations in view of the completely inflated prices of the tech giants in particular, . The focus is on the power to set prices in order to increase profit margins. There is already talk of "greedflation.". The current inflation in Germany is also partly due to the pricing power of large corporations.
For the world's poorest people, the food situation has worsened due to war and inflation. "Hunger is also growing. Even before the sharp rise in food prices in 2022, almost 3.1 billion people could not afford healthy and adequate food, and the number has risen since then. Global food prices increased by 18 percent in 2022 compared to 2021 and energy prices by 59 percent. Up to 828 million people are going hungry. Almost 60 percent of the people who are currently at risk of hunger are women and girls, as they are particularly disadvantaged by patriarchal structures. They have lower incomes and are increasingly working in insecure working conditions" (Oxfam). The rising food prices are also such a big problem because the cultivation of food for their own supply in many countries of the global South has been pushed back in favor of export products (coffee, cocoa, cotton, etc.).in the context of globalization. In addition, the increasing extreme weather events caused by climate change (drought, floods) are increasingly threatening crop yields.
3
1. Robust economy in Germany
The economic development in Germany is exposed to extraordinary burdens. The Corona pandemic led to a decline in economic output by 3.7 percent into a severe recession. The way out of the crisis began in 2021. The mood for 2022 was initially very optimistic. At first, the pandemic was considered to be largely overcome. The joint forecast of the leading research institutes expected a growth of 4.8 percent for 2022 in its fall report of 10/13/2021.. Individual institutes were even more optimistic.
Whether such a boom would have occurred under other circumstances is arguable. Comprehensive sanctions were very quickly imposed when Russia invaded Ukraine on February 24, 2022. Energy prices exploded; uncertainty about future developments was great. The economy had to cope with another unusual burden.
Under these new conditions, it could be assumed that Germany would fall into a severe recession. An unprecedented slump would have threatened, particularly in the event of an energy shortage, . But things turned out differently: at least for 2022 the German economy has shown astonishing resiliency.. Economic output was even able to grow by 1.8 percent.. The catch-up process has been successful; the pre-crisis level of 2019 was exceeded. The decisive factor here was that a gas shortage was prevented. Due to the price explosions on the energy markets, there were significant gas savings nationwide. They resulted mainly from a price-related reduction in the demand for gas and heating in households and industry and, in the latter case, from a temporary fuel switch to other fossil alternatives (oil or coal). Above all, the increased coal firing in particular led to the same level of energy consumption instead of decreasing greenhouse gas emissions.
As a result, the gas storage facilities are sufficiently filled. Some energy-intensive companies have cut back production due to high energy prices. There were still major problems in the supply chains over the course of the year; industrial production effectively stagnated. Gross value added in the manufacturing industry only increased by 0.2 percent. The services sector benefited greatly from the lifting of corona sanctions (in spring 2021 there were still considerable restrictions). Above all. the trade, transport and hospitality sector grew by 4 percent on a price-adjusted basis.
Growth was driven almost exclusively by private consumption which accounted for 2.3 percentage points of the total growth. While the surplus (exports minus imports) in the past was the driver of growth in the German economy, since 2016 it only made a positive contribution to GDP growth in 2022. 2022 with the war, the sanctions and the disrupted supply chains was particularly difficult for Germany internationally. In addition, the sharp rise in import prices led to a massive deterioration in the terms of trade and further losses in prosperity from external relations. In this situation, the German account surplus also shrank sharply. The trade surplus depressed economic output by 1.3 percentage points. Domestic consumption, on the other hand, had a growth of 3.2 percentage points.
The high rate of inflation led to a considerable loss of purchasing power. Wages were no longer able to keep pace with prices in the second half of the year. Real wages shrank by 5.7 percent. Over the year as a whole, they fell according to initial calculations by 4.1 percent. This is the third decline in a row, after real wages fell by 1.1 percent in 2020 and by 0.1 percent in 2021. The increase in private consumption was therefore financed by saving. Consumption options were severely restricted in the corona crisis; were severely restricted; there was a "savings surplus" of around 200 billion euros. In 2022, the situation normalized and the savings overhang was reduced.
Government programs have also supported consumption. The first three relief packages to cushion the effects of inflation provided 95 billion euros, of which, according to ifo calculations, only EUR 33.4 billion will be effective. The Alternative Economic Policy Working Group
Economic Policy Working Group criticizes the lack of social targeting of these programs and their negative ecological impact. However, they have a a noticeable, demand-strengthening effect.
Looking ahead to 2023, the mood has brightened, but there can be no talk of euphoria. Stagnation can be assumed according to the forecasts available to date, . The biggest economic risk factor remains the energy supply. It is by no means certain whether the gas supply will be sufficient in winter 2023/24.... Energy prices have recently fallen and all forecasts for 2023 assume a slightly lower inflation rate compared to the previous year. At the same time, the wage settlements point to a stronger rise in wages, which will reduce the loss of purchasing power. However, an enormous loss of purchasing power will occur in the short and medium term. The expansionary effect of fiscal policy will be somewhat greater than in 2022 since the gas cap on electricity prices will be somewhat greater than in 2022.
2 The state compensates for market failure
The state is back as a global player on the economic policy stage. Nobody seriously doubts that active economic policy is necessary . Even during the major economic and financial crisis of 2008/09, economic policy had already acted together with the central banks with large spending programs against the collapse of the financial markets. This could still be seen by the
representatives of market orthodoxy as a one-off fall from grace in an extraordinary situation. But when the world plunged into the corona pandemic, the state was once again on hand with appropriate spending programs to cushion the consequences of the crisis, stimulate demand
and stabilize the economy. In 2022, the federal government had various packages to contain the consequences of inflation. This was done in different party constellations in the federal government and in many countries around the world. It has become the new normal in the current capitalist world.
The Alternative Economic Policy Working Group has been a vehement advocate of an active state investment economic policy. The change in policy that has now taken place policy change demonstrates the importance of the persistent work of the Alternative Economic Policy Working Group policy over decades. The successes of this policy are quite impressive: although all three major economic crises of the past few years had very different causes (collapse of the financial markets, lack of energy and raw materials). All three have the potential for a dramatic economic collapse. The situation could be stabilized again relatively quickly.
The effectiveness of the current active financial policy also depends on monetary policy. In the past, the expansive monetary policy of the European Central Bank (ECB) in its efforts to stimulate and strengthen sustainable macroeconomic development and thus counteract the break-up of the eurozone. Today the ECB is concentrating one-sidedly on combating the high interest rate last year in Germany which peaked at 10.4 percent and which, according to most forecasts, will be between 6 and 7 percent this year.
The reason behind the ECB's current policy is that there has been a change in the explanation of inflation. Flashback: After the inflation shock last year, the ECB justified its monetary policy by saying that the causes were the rise in prices for imported energy and food. This imported
supply shock was "temporary" and could not be successfully combated with a restrictive monetary policy. Under the massive barrage of criticism, the ECB changed its position last summer. The causes of inflation were narrowed down to the monetarist primitive causality: if inflation continues to dominate, this could only be due to a surplus of cheap money. Other causes of inflation - such as the rise in energy prices due to the war.
Energy prices, the crisis of globalization (supply chain problems) and the monopolistically enforced price hikes, but also the ecological costs were not taken into consideration. The increased core inflation rate, which excludes the prices for energy and food price, was evidence of the home-made inflation. However the rise in the core inflation rate reflects the broad passing on of energy costs across the board to the end consumer.
The so-called homemade inflation now being fought by the ECB is attributed to excess demand due to government spending on crisis aid and to expected wage increases that drive inflation. The neoliberal-monetarily motivated demand that monetary policy should discipline
wage negotiations is already doing the rounds again, despite its lack of success to date. Finally, under public pressure, the ECB finally acted. Key interest rates were raised in five steps from July 2022 to February 2023.
In the end, the key interest rate at which banks can borrow money from the ECB was 3 percent. Added to this is the planned reduction in the bonds purchased by the ECB which are to be reduced by 15 billion euros per month from March this year.
The results of this restrictive monetary policy are not surprising and can hardly be successful due to imported energy. The burdens on corporate investment and private households (for example when purchasing residential property) due to higher interest rates on loans are certain. Banks, which hardly pass on the higher interest rates via fixed-term and overnight deposit accounts, but increase the interest rates on loans, are among those with high interest surpluses and are ultimately among the winners of this monetary policy.
Active fiscal policy is about much more than economic policy. The socio-ecological restructuring of society requires stabilization of demand and also spending and investment. The crises have mercilessly exposed the deficits in many social systems. There can be no talk of resilience in healthcare, nursing care, education and the provision of affordable housing; the systems are operating at their limits. In the past MEMORANDUM, the Alternative Economic Policy working group dealt with these issues. Far-reaching improvements have so far failed to materialize. The ecological restructuring is also progressing far too slowly.
This is also reflected in the still far too little public investment in Germany. In 2020, public investment rose by 8.2 percent in price-adjusted terms. That was a step in the right direction, but still completely insufficient to reverse many years of disinvestment in the public sector.
In 2021 and 2022, public investment was reduced again by 2.8 and 2.0 percent respectively. Public investment in plant and equipment shrank by 3.2 percent in 2022, although military weapons systems are now included in this category. The share of public investment in GDP
was just under 2.7 percent in 2022. That is more than in the years before the coronavirus period, when it amounted to 2.1 to 2.3 percent. But that is not enough for the ecological conversion nor for repairing the largely dilapidated public infrastructure.
The most important source of public investment are the municipalities, where the investment crisis is still acute. "New needs are emerging, but the necessary investment ramp-up, however, is still a long time coming" (KfW Municipal Panel 2022). The KfW Municipal Panel put the investment gap in 2020 at 150 billion euros, rising to 159 billion euros in 2021 and will also be of a similar magnitude in 2022.
The Alternative Economic Policy working group has long called for a comprehensive investment and spending program of at least 150 billion euros per year. This remains topical and is more urgent than ever. Large debt-financed spending programs have been adopted (most recently
the "double whammy" of over 200 billion euros to finance the electricity and gas price brakes) in the past few years to overcome the crises, which has led to an increase in public debt. Permanent financing via taxes makes sense (even if the debt level in 2022 at 67.4 percent of GDP is by no means dramatic and significantly lower than after the 2010 financial crisis with 82.4 percent of GDP). The working group on Alternative Economic Policy calls for a tax policy that not only increases tax revenue, but above all taxes high incomes and large fortunes in particular to finance public tasks.
The Alternative Economic Policy working group demands the following in economic and financial policy:
- A comprehensive investment and spending program for the areas of education, municipal spending, energy-efficient building, building refurbishment, social housing, local care infrastructure and for the labor market and qualification is more necessary than ever.
Although the state has provided considerable aid to cushion the impact of the crisis, public investment has fallen again in the past two years and is still far too low.
- A fairer tax system with higher revenues to finance public spending. This includes a wealth tax, a higher top tax rate for income tax and the prevention of tax evasion, tax structuring and corporate tax avoidance.
- The old demand for better regulation of the financial markets remains on the agenda. The call for a financial transaction tax is still correct and important. Many ecological and development projects could be financed with it.
- The abolition of the debt brake in the Basic Law. The redefinition of debt as "special assets" and thus their separation from the normal budget is not a solution. Should the abolition of the debt brake fail due to the the high constitutional hurdles, reforms are needed at the very least to ensure adequate financing and an anti-cyclical spending policy for public budgets.
- At European level, the fiscal rules must be abolished or at least comprehensively reformed. The resilience and Recovery Fund must be developed into a permanent instrument. This will also help to overcome the industrial political challenges.
- In addition, a one-off asset levy as a burden equalization to cope with the burden of the crisis, inflation and the ecological restructuring.
- The ECB should refrain from further rounds of key interest rate hikes. The most important task is to slow down the divergence development of the eurozone. The "Transmission Protection Instrument"(TIP) with the interest rate turnaround was therefore right, It allows bond purchases of crisis countries with risk-related high interest rates, such as Italy, as an exception. Overall, the ECB's monetary policy must return to monetary support for active fiscal policy.
3. active labor policy in times of segmented labor markets
The number of people in employment has been rising since 2010 and unemployment is falling. The figures were worse only in the first year of the corona crisis 2020, . In 2022, they have recovered again despite the consequences of war and sanctions.. In this respect, the labor market is surprisingly resilient in this respect. This was only possible because the state counteracted this by short-time working. But despite this long-term recovery, 4 million people were still looking for work in 2022 - actively or in the hidden reserve. In the second half of the year, unemployment rose above the previous year's level.
With the improving labor market situation, the number of job vacancies also rose from 1.4 million in the 2nd quarter of 2019 following a brief corona-induced decline by the second quarter of 2022 to the historically high figure of 1.93 million (IAB Job Vacancy Survey 2022). According to the WSI works and staff council survey from 2021/2022, 56 percent of companies had difficulties in filling vacancies, especially in the healthcare sector, the public sector, the construction trades, in parts of the skilled trades and in technical, IT and some skilled metalworker occupations. The positive consequence:more employees with good "market value" obviously have to accept jobs with poor working conditions than in the past. Despite the good labor market situation, more than a third of employees still have to work in potentially unstable employment relationships, i.e. with a low number of hours, fixed-term contracts, temporary work or with low wages.
The structure of unemployment shows that companies are still not letting go of their high demands on the resilience and availability of jobseekers, while at the same time investing too little in the qualifications of employees. According to an IAB survey from 2021, only 39
percent of companies were prepared in principle to take on the long-term unemployed; for 54 percent, it was out of the question. The high proportion of women in the hidden reserve also shows how little companies respond to their needs for family-friendly adjustments.
The Alternative Economic Policy Working Group sees the shifting balance of power in the labor market as an opportunity to expand the existing labor market policy into a labor policy in which companies are obliged to train dependent employees and maintain their working capacity
throughout their working lives.
The Alternative Economic Policy Working Group policy demands for the labor market:
- The abolition of the special regulations for mini- and midi-jobs.
- Raising the statutory minimum wage to 13 euros per hour before the end of year 2023.
- The introduction of a legal entitlement to switch between full-time and part-time work with the right to return and compensation.
- To avoid false incentives, the splitting of the gradual abolition of splitting between spouses.
- Public childcare and ll-day schools must be further expanded.
- Care work in the family must be shared between partners by shorter working hours with wage compensation (publicly or collectively financed). An equal division between women and men must be particularly encouraged.
- All young people under the age of 27 must be guaranteed a training offer anchored in SGB III.
- Company-based training must be financed by a pay-as-you-go fund which all companies pay into (already already realized for the construction industry and the care sector).
- Similar to initial vocational training, investments in training, investment in in-company further training must be broadened and detached from micro-economic individual cost calculations. As with the required pay-as-you-go financing for initial training, there must also be a fund financed by all companies. Inter-company facilities supplement the further training opportunities for small and medium-sized enterprises.
- Works and staff councils must have a say in personnel, a right of co-determination in personnel planning instead of consultation rights. When companies are planning staff reductions, the reconciliation of interests regarding these measures must be subject to co-determination and not just the social compensation plan, which only regulates the conditions
for staff redundancies.
- Unemployed people must have a legal entitlement to further training/retraining. The qualification phase must not be counted towards the ALG-I. The unemployment benefit must be increased by a further training which must be well above the additional earnings limit.
- The standard rate in the new citizen's allowance must be increased from 502 euros by at least 200 euros (the other maintenance rates analogously). The training allowance must be increased to g300 euros. During a qualification or training phase, the unemployed must not be
be forced to move or draw on their savings. In addition, the job centers must be better equipped so that they can provide the promised individual advice to all..
4 Globalization in crisis
In Memorandum 2022, the Alternative Economic Policy study group discussed globalization in great detail. This process that has been smouldering for a long time began as the consequences of the Corona crisis became increasingly clear. The war and the sanctions have not only endangered the world's supply of energy and raw materials. The geopolitical division of the world has increased. A new bloc formation is crystallizing.
Historically, globalization can be seen by the increase in the share of exports (goods and services) as a proportion of economic output. Exports increased more strongly than economic output, and international interdependence grew. From 1986 to 2008, there was a strong increase, the share of exports almost doubled. Since the economic and financial crisis, it has decreased slightly again.
Globalization was a central project of the neoliberal (neoclassical) turnaround: Free trade, free movement of capital, deregulation of the financial markets, floating currencies, privatization worlds in the nation states and privatization in the nation states and the dismantling of state structures - all of this was driven forward from the beginning of the 1980s.
The deregulation of the financial markets led to more and more new financial products and a speculative expansion of the entire financial sector. The formation of financial assets has decoupled from the development of the real goods markets. The financing of investments and
economic development is easier in this system. There is plenty of liquidity. Globalization is more than just trade: growing worldwide capital linkages and direct investments are also part of it. Global direct investments amounted to USD 1.5 trillion at the end of 1990. At the end of 2019, this figure had grown to 31 trillion US dollars. The German export industry is a major winner of globalization. In total, Germany exported goods worth just under just under 1.4 trillion euros.
World trade...
The global financial and economic crisis 2008/09 revealed the enormous risks of globalization.
Due to the close and non-transparent interdependence of the financial sector, the collapse of bad real estate loans in the USA could trigger a de facto collapse of the global financial markets. The shock waves could spread very quickly to the real goods markets. Only energetic government intervention could prevent this.
After the financial crisis, criticism of globalization from the right massively increased. Instead of the neoliberal discourse, in which the high song of free trade was sung, nationalist tones were heard more and more often. The employed and unemployed people in the old industrialized regions thus became the mobilization potential of right-wing populist movements. The opponent of the socially weak was no longer capitalism or their own government, but the foreign country. The high point of this development for the time being was Donald Trump's "America first" policy in the USA.
Globalization came under serious pressure for the first time with the coronavirus pandemic and the countermeasures. International supply chains were significantly disrupted for a long time. This development intensified in 2022. Lack of oil and gas and also many metals and minerals, artificial fertilizers and grain have driven up inflation and put further strain on supply chains.
The war has also driven the geopolitical division of the world. Even before that, a power struggle for a dominant position in the world has waged between the USA and China. Now there are increasing threats to form a bloc with China and Russia on one side and Europe, the USA and Japan on the other. As a consequence, close economic relations with China are now viewed much more critically.
In addition to the disruptions to globalization caused by the financial crisis, the corona pandemic, war and sanctions as well as geopolitical rivalries, the climate catastrophe and the necessary decarbonization policy and increasing digitalization are also causing serious upheavals in the global economy.
Source: Federal Statistical Office, foreign trade statistics
The ecological transition requires more government and more public funding. The state also has a role to play in digitalization. An industrial policy is necessary. The EU has responded with strategic industrial policy goals and new funding opportunities.
The globalization project has always been criticized from a left-wing perspective. Attac as a movement was explicitly critical of globalization, above all against the actions of the financial markets, but also against free trade agreements. There have always been large protest movements. Globalization was the cudgel to help "market right-wing democracy" to triumph. It has played a significant role in the increasing inequality worldwide. The richest ten percent now own 76 percent of the world's wealth. The bottom half of the entire population have only two percent of the world's wealth (World Inequality Lab, report on Global Inequality 2022).
It looks as if the age of market-driven driven hyper-globalization is coming to an end. What is at stake is nothing less than a reorganization of the global economy. A thread of discussion has recently emerged that is shared by many economists, but above all by the German Council of Economic Experts (Annual Report 2022/23, para. 505ff.). The strategy starts with what companies are already doing to secure their supply chains: a return to more warehousing and a diversification of the supply chains. Politicians are called upon to form strategic alliances to help with the supply of critical raw materials. Increased recycling should also support the supply of raw materials. A fundamental reduction of economic activities is crucial... In addition, the global implementation of European standards and norms is to be driven forward. Such a program would contribute to economic stabilization. But it would not make globalization more socially or ecologically democratic. The Alternative Economic Policy therefore calls for a fundamental rethink. We need more multilateral, rule-based structures.
The Alternative Economic Policy Working Group explains with a view to the future of globalization:
- Free trade agreements are not transparent but are often subject to a great asymmetry of power in the negotiation process and trivialize social concerns even more than the current rules of the WTO. In addition, the formation of political blocs is promoted. The Alternative Economic Policy study group consistently rejects free trade agreements.
- The WTO must consistently abandon its focus on market radical dogmas. Within the framework of the WTO, a set of rules for a fairer exchange of trade that also promotes the introduction of ecological production methods is imperative.
- Supply chain laws are an effective means of achieving fairer trade relations. These companies are obliged to punish violations of the law by their suppliers. Germany has a supply chain law, but it is still completely inadequate. In the EU, a supply chain law is currently in the legislative process. In principle, the EU level is more effective than national laws and the EU draft is more far-reaching. Germany has many deteriorations in this process, for example, liability restrictions for certifications and restrictions on the human rights to be respected by companies and their climate plans. The Alternative Economic Policy working group calls for the more far-reaching original draft.
- The implementation of the currently negotiated UN agreement on business and human rights (UN Treaty) is also an important step towards better globalization.
- In the negotiations on an effective climate protection agreement to achieve the Paris climate targets, industrialized countries must finally acknowledge their CO 2 debt and commit to corresponding compensation payments to the countries of the global South.
The climate crisis leaves us no more time for delaying tactics.
5. the end of fossil fuels - time for alternatives
Time for alternatives
The energy supply in Germany had to be placed on a new basis with the sanctions policy against Russia on the one hand and Russia's failure to deliver natural gas on the other. In addition to saving natural gas and expanding supplies from Norway and the Netherlands (which was only possible to a limited extent due to limited production capacity), the use of nuclear power was extended and coal-fired power plants from the reserve were reconnected. In addition, liquefied natural gas (LNG) is now being sourced. With LNG in particular, however, the risk of new dependencies arises.
LNG is natural gas that has been processed and liquefied through strong compression and cooling. For this about 10 to 25 percent of the energy content of the gas is utilized.. It can be transported using special tankers and then has to be returned back into the gaseous state ("re-gasified"). The largest supplier countries are the USA, Australia, Qatar, Malaysia, Algeria, Russia and Nigeria. The United States has been trying for years, to replace Russian pipeline gas with US LNG. Development in Europe is a huge gain for US companies.
LNG from the USA and Canada in particular largely consists of environmentally harmful fracked natural gas. The pollution of the soil and groundwater and wastewater are not the only problems with fracking. Gas leaks from the countless wells also harm the climate. All LNG varieties have in common the energy losses during liquefaction and transportation by ship. With natural gas pushed through pipelines over thousands of kilometers, this in turn leads to leaks of climate-damaging methane escapes. According to Greenpeace, LNG with a high fracking from the USA is over six times more expensive and from Austria around 7.5 times more harmful to the climate than the pipeline gas from Norway.
LNG has higher production costs than pipeline gas. Irrespective of this, the gas shortage drove up prices on the European markets for LNG and pipeline gas to astronomical heights. European wholesale prices ranged from 200 to 340 euros per megawatt hour (euro/MWh) in August and September 2022, 10 to 17 times the prices called for in spring 2021 (around 20 euro/MWh). LNG tankers were even diverted between Asia and Europe to reach the more lucrative buyers.
Before the war in Ukraine, there were more than than two dozen LNG terminals in the EU, but none in Germany. With the LNG Acceleration Act in May 2022, the German government designated a large number of terminal locations. It provided almost three billion euros for their construction or rent. The Working Group on Alternative Economic Policy criticizes the build-up of huge over-capacities in the LNG sector. This jeopardizes the necessary energy transition. According to a study by the New Climate Institute, the capacity amounts to 73 billion m3
per year. That would be around 50 percent more than Germany ever imported from Russia (46 billion m3 per year). In order to follow the path to the agreed German goal of climate neutrality in 2045, German gas consumption would have to be steadily reduced consumption would have to be steadily reduced - by around a fifth by 2030 compared to today's level, half by 2035 and to almost zero by 2045.
The German government and the terminal operators argue that if gas consumption falls in the course of climate protection, the LNG terminals could be converted to "green hydrogen". But such "H2 readiness" is technically unrealistic. The price rally on the energy markets has brought considerable non-performance-related extra profits to a number of large corporations, energy producers and suppliers via the connection of the gas market to the electricity market where electricity prices also climbed to unprecedented heights.
With the aim of siphoning off crisis-related extra profits, the EU Council of Ministers set a revenue cap at the end of September 2022, the EU Council of Ministers set a revenue cap for producers of nuclear, lignite and green electricity. They are allowed to earn a maximum of
180 euros/MWh on the wholesale markets. The member states are to absorb and redistribute anything above this at least 90 percent...
Mineral oil and gas companies and refineries have also profited exorbitantly - and continue to earn excess profits. In Brussels, the Council in September allowed companies that trade in fossil fuels higher profits this year and next year, 20 percent higher than the average profits for the years 2018 to 2021. All profits in excess of this are to be skimmed at "at least 33 percent". The Alternative Economic Policy working group demands the absorption of 80 percent of excess profits.
According to calculations by Agora Energiewende, German greenhouse gas emissions last year amounted to 761 million tons of CO 2 which represents a reduction of 38.7 percent compared to 1990.
Despite a 4.7 percentage point reduction in energy consumption, the target for 2022 of 756 million tons of CO 2equivalent was missed. The balance in the transport and building sectors is disastrous. Nevertheless, the FDP is preventing even cost-effective climate protection measures such as a speed limit. In the building sector, the federal government has been delaying the Energy Efficiency law.
Within the coalition itself, there is disagreement as to whether there will finally be comprehensive efficiency standards for refurbishment standards for renovations, especially for buildings in the worst energy condition, as required by the EU Buildings Directive under the EU climate protection package "Fit For 55" package. At the same time, a solid heating transition in the building sector is still in the stars, although many energy refurbishments are not rent-neutral and thus increase the pressure to displace tenants. Well-done and needs-based subsidized refurbishments, in which the landlords are also made financially responsible increase independence from fossil energy sources and their price trends.
Despite supportive legislative changes, green electricity and grid expansion are only making slow progress. The implementation backlog is now dramatic, especially for offshore wind. Since 2020, the 7.8 gigawatts (GW) of installed capacity have not been added. The situation is somewhat better for photovoltaics with an increase to 63 GW and onshore wind with an increase to 57 GW.
However, the tenders for upcoming projects have been heavily undersubscribed for some time. Overall, the stock of wind and solar power must increase by 2030 from 128 GW to 386 GW, tripled so that the German government can achieve its own targets. At the same time, grid expansion is lagging well behind plans. According to a study by Prognos, the third quarter of 2022 of the grid expansion Federal Requirements Plan Act (BBPIG) by the year 2030 planned 10,413 kilometers of lines in the extra-high grid, 886 kilometers have been implemented and a further 656 kilometers approved. In the hydrogen sector, the lack of EU guidelines on the definition of "green hydrogen" are still preventing investments for the market ramp-up.
The Alternative Economic Policy Working Group policy calls for the following in energy policy:
- The reduction of the planned terminal capacities for LNG. These are completely oversized and prevent an ambitious energy transition policy.
- The linchpin for the energy transition is the accelerated expansion of green electricity plants. To achieve this, the EU requirements for an accelerated expansion of the use of renewable energies must be swiftly incorporated into the regulations and practices in the federal states. The financial participation of the local authorities in the earnings of green electricity operators must be made binding nationwide and raised above the 0.2 cents/kWh stipulated in the EEG. In addition, the procedures in the expansion of the grid must gain speed.
- The EU must set guidelines for the definition of "green hydrogen" in order to ramp-up investments for hydrogen technologies on the market. These criteria must not be too soft.
- The energy price brake must be made more social. The working group Alternative Economic Policy demands socially differentiated direct payments to households instead of the current mechanisms based on historical consumption.
- The transport sector has major structural problems. Rapid and cost-effective measures for climate protection such as an immediate speed limit on highways are crucial in addition to strengthening rail, public transport, cycling and walking at the expense of motorized private transport,
- Significant funds have been made available for structural change. However, the corresponding plans are to end between 2035 and 2038. The acceleration of this process, which is necessary for climate policy must be carried out wisely and with the actual participation of civil society. It should be set out and anchored in an amended Structural Strengthening Act.
6 Blind spots in climate policy: Sufficiency and climate-friendly housing
Many socio-political ideas about changes in behavior, lifestyles, production and consumption can be described with the term "sufficiency". The IPCC describes sufficiency measures as "a set of measures and everyday practices that reduce the demand for energy, materials, land and water..."
"Sufficiency" is often used alongside "efficiency" and "consistency" as the third core strategy for sustainable development. Sufficiency policy, leading to an increase in the quality of life has been successfully practiced for a long time (e.g. car sharing) or, for example, in the reduction in livestock farming set out in the coalition agreement which is associated with a reduction in meat consumption, or the ban on the destruction of returns in the mail order business.
The long-term energy and climate protection scenarios are currently dominated by two main technical strategies: the accelerated expansion of renewable energies ("consistency") and a massive increase in energy productivity ("efficiency"). The seemingly reassuring message is that if these two strategies are implemented consistently worldwide, then the 2-degree target of the Paris Agreement of 2015 can still be achieved with technology already known today. Even the actually necessary 1.5-degree target can be kept within reach.
There is no doubt that technological breakthroughs and the accelerated implementation of the two main strategies are the prerequisites for sufficient climate protection. A socio-ecological transformation towards climate neutrality for the world by 2050 and in Germany by 2045 can be achieved with the predominantly technical strategies of "efficiency" and "consistency" alone.
Sufficiency policy enables more climate-friendly behavior and therefore goes far beyond individual behavioral patterns and takes into account existing social inequality. The relevant question is not a blanket and seemingly indiscriminate "How much is enough?" but rather "How much is enough for whom?" - so that the ecological transformation in our unequal society does not leave even more people left behind in even more desperate situations than before.
Climate change has specific main causes and main affected groups. There are considerable differences between rich and poor countries, but also within these countries between rich and poor people. A target-oriented strategy for climate and environmental protection must no longer treat distribution issues as a moral appendix, but must regard climate justice and the fight against inequality as prerequisites for a systemic approach to socio-ecological transformation.
In 2022, 50 years after "The Limits to Growth" was published, the Club of Rome called for climate protection for the first time: "The rich must pay the bill". This is a concept for a significant redistribution of income and wealth in favor of poorer households. This objective is congruent with that of the working group Alternative Economic Policy. The question of distribution is inextricably linked to the ecological question. The current report to the Club of Rome, "Earth for All", presents a purely technical view of the future of energy transformation and climate protection. Only a comprehensive system change can be successful. And yet the industrialized countries have historically and currently emitted by far the most greenhouse gases per capita and abuse the atmosphere excessively as a CO 2 dumping ground.
Source: World Inequality Lab, World Inequality Report 2022
Insofar as the control and incentive effects of CO 2-pricing are used, they must be accompanied by a redistribution of the revenue, the Alternative Economic Policy working group emphasizes. However, redistribution is by no means sufficient as a measure. The investment needs of poor households for efficiency and consistency measures in buildings, such as thermal insulation measures or heating replacement programs, must also be supported by public funding so that the incentive effect favored by economists for "vulnerable households" due to a lack of financial viability does not completely come to nothing.
Climate and distribution issues clash in the building sector more than in any other sector. The sector fails to meet the sector targets: In Germany alone, it consumes 517 million tons of domestic mineral raw materials per year and at the same time causes 40 percent of greenhouse gas emissions, with 66 percent of emissions caused in the residential building sector and a comparatively small proportion in non-residential buildings. However, it is not only the climate issue, but also the social issue that has also come to a head in recent years in the building sector. For example, existing rents in the five largest cities increased by an average of 15 percent between 2008 and 2018 and new lettings by as much as 50 percent. The lowest fifth of all tenant households in terms of income spent an average of 42.6% of their disposable income on housing costs in 2021.
The social and ecological issues can be cannot be separated from each other when it comes to living space. Households with higher incomes live in larger living spaces and pay higher rents and heating costs than households with lower incomes, but spend a smaller proportion of their income on this.
Examples of sufficiency measures can be found in neighboring countries. In Zurich, for example, there is a residential area limit, embedded in a comprehensive climate strategy, which aims to promote the reduction of emissions. The Alternative Economic Policy working group calls for sufficiency measures in the building sector...
7 There is another way - Pensions in Austria
Alternative policies are possible within the framework of a capitalist international comparison and provide important food for thought. Examples can be found not only in Scandinavia. Austria also has many achievements in the design of its social model. The country shares many similarities with Germany. It starts with the language, culture and history. The social security systems are also in the tradition of the Bismarckian social security system. In Europe, Germany belongs to the group of countries in which inequality has increased relative to the 1980s in almost all indicators (Gini coefficients for income and wealth, risk of poverty, deprivation, etc.has risen sharply over the past 30 years.). In Austria, on the other hand, the increase has been small. In terms of the Gini coefficient as a common measure of inequality, the two countries were roughly on a par in the mid-1990s. Austria was able to maintain this level while Germany as a result of a policy of targeted expansion of a large low-wage sector while at the same time neglecting public infrastructure.
Germany has changed from a country with below-average inequality to a country with persistently above-average inequality. In Germany, collective bargaining coverage is only just over 50 percent. Low-wage earners for an extended period of time are quickly at risk of poverty in old age if they only receive benefits from the pension insurance and does not have a poverty-proof basic pension. Logically, therefore, the expansion of low-paid and precarious employment was followed by a delayed increase in the poverty risk of older people. This has also occurred.
In the past, the German and Austrian Austrian pension systems were very similar. But this is no longer the case today. The pension policies of the two countries are set differently. Looking back, we see a similar pattern to that of the labor market. Germany pursued a policy of successive deregulation, while Austria, on the other hand, expanded the constitutional protection of the social partnership.
The Alternative Economic Policy Working Group in its MEMORANDUM 2004 criticized the Schroeder's government promotion of private pension products. The group of insured persons within a citizens' insurance scheme could be expanded. In the years that followed, further cuts were made, above all raising the retirement age. Even today after 45 years of work, according to the federal government figures, 36 percent of future pensioners will receive a maximum of 1,200 euros per month net from the statutory pension scheme. The situation is particularly dramatic due to lower earnings, more frequent part-time work and shorter phases of employment for women. In the MEMORANDUM 2021, the Alternative Economic Policy working group underlined the weaknesses and challenges of the German pension system as a whole.
One problem here is the state-subsidized "Riester pension", which has only been a success only for the private insurance industry. For those employees who, due to the expansion of low-wage employment have no opportunity to either save up financial assets or buy their own home, it was a flop. From the failure of the three-pillar strategy, the traffic light government is now merely building up a capital stock that requires state management.. For the first time, ten billion euros in the 2023 budget are financed by borrowing...
In Austria, the pension system has also been the subject of reforms... Increasing the standard retirement age to 67 or even higher has not been the subject of serious discussions. Yet the demographic development in Austria is very similar to that in Germany. The Austrian reforms aimed at stabilizing the standard of living in the statutory system according to the 45/65/80 formula. After 45 years of insurance, the gross retirement occurs at the age of 65. The gross replacement rate should be 80 percent. Initially, pensions of self-employed persons, farmers and freelancers were equalized through the inclusion of civil servants. At the same time, sustainable financing requires an adequate contribution rate. At 22.8 percent, it is around 4 percentage points above the German level whereby an over-parity exists. The contribution rate for employers is 12.55 percent, while the rate for employees is 10.25 percent. Due to its broadening, the Austrian system has effectively been transformed into an employment insurance scheme. Contrary to many forecasts, the system is by no means on the verge of financial collapse.
The current government program of the ÖVP and the Greens (government program 2020-2024) therefore does not provide for any new course. Neither the level of benefits nor the retirement age is to be raised. The coalition agreement focuses on the goal of overcoming poverty in old age as far as possible.
There are also problem areas in the Austrian security system: The provision for women is inadequate, which is largely due to the high prevalence of part-time work and the early standard retirement age of 62 years in 2023; in 2024, there be a gradual increase to the standard retirement age of 65 for men. 30 years of contributions is required for a de facto minimum pension... Another problem is the popularity of early retirement. Attempts are being made to counter this by but these only work to a limited extent...
The policy proposals put forward by the Alternative Economic Policy group in the MEMORANDUM 2004 (in particular citizens' insurance, inclusion of the self-employed, no capital cover) were not only fulfilled in Austria, but have even been exceeded in view of the high net pension level of over 80 percent. The Austrian development model proves that even in an ageing society, it is possible to maintain a high level of public pension provision and be economically successful at the same time.
8 Conclusion
Internationally, there is growing confrontation through more cooperation. The EU is also called upon to play a stronger role. International agreements must focus more on balancing interests and must not be characterized by power asymmetries. A globalization that leads to poverty and even hunger for many is not acceptable.
The economic and social risks have increased enormously. The Alternative Economic Policy stands for a path of public pressure to dare a democratic awakening.
Ecological restructuring and the expansion of the welfare state must be considered, conceived and coordinated. An active financial policy must compensate for inflation for low-income and poor private households along with bridging programs for energy-intensive companies, including craft businesses. This stabilizing fiscal policy must be complemented by an active monetary policy that combats inflation without accelerating the economic downturn.
Regulation could tame the greed for profit. The energy supply crisis has given new urgency to the transition to sustainable energies.
The Alternative Economic Policy Working Group sees itself confirmed on its path. Today, profit-driven globalization is at an end. The call for economic policy alternatives is louder and louder around the world.
___________________________________________________________________
MEMORANDUM 2022
Out of the climate emergency -
Ideas for change
EXECUTIVE SUMMARY
Table of contents
1. crisis of globalization
2 Slowing economic development in Germany
3. labor market still in crisis
4 International supply problems are also driving inflation
5 Coalition agreement - dare to make more progress?
6. for ecological restructuring: entry into a circular economy
7. for the ecological transition: industrial policy
8. for the ecological transition: hydrogen economy
9. a strong public sector needs staff
10. new departure needs a new policy
MEMORANDUM 2022
[This memorandum published in February 2022 is translated abridged by Marc Batko (marc1seed@yahoo.cm) from the German on the Internet, www.alternative-wirtschaftspolitik.de.]
1. crisis of globalization
We are experiencing a crisis of globalization. The highly complex, networked production chains have stuttered as a result of the coronavirus pandemic. This is slowing down production worldwide. For Germany, this means that some goods are not available on the market, and the industry lacks intermediate products and raw materials. The shortage of materials is hitting the metal and electrical industries. In surveys by the ifo Institute, around 80 percent of companies complain about problems with the procurement of input materials. In the manufacturing
industry as a whole, the figure was just under 70 percent in December 2021. Since this data has been collected, there has never been a comparable situation. Before the Corona crisis, these figures were always below 20 percent.
In 2020, the first year of the crisis, many borders were closed and many factories were not producing. The situation eased again in the summer. Since the spring of 2021, the shortages then increased dramatically. The Handelsblatt (07.02.2022) lamented that the German automotive industry produced fewer vehicles in 2021 due to a lack of semiconductors than it last produced 46 years ago
Capitalism, which up to now has been characterized by the abundance of production in markets that tend to have too little purchasing power, was suddenly no longer able to meet demand. There are many reasons for this. In the meantime, the crisis has affected the entire global trade
logistics. This was exacerbated by local lockdowns in Asia, especially in China, and port closures. Over ten percent of all global shipping freight was stuck in container congestion (Kiel Trade Indicator).
The oil and gas producing countries continued to actively limit capacities and demand. In chip production, increasing digitalization is leading to an increase in demand to which production cannot keep pace despite considerable investment. Digitalization and the expansion of renewable energies are also increasing the demand for certain raw materials (cobalt, copper, lithium).. Here, too, extraction capacities cannot be increased fast enough.
Free trade and globalization were central elements of the neoliberal economic model. The system suffered its first setback with the global economic and financial crisis in 2008/09. After that, global trade expanded more slowly than the global economy and the degree of globalization decreased. With the presidency of Donald Trump in the USA, the country that had driven globalization like no other changed its course. Protectionism and customs policy determined policy from then on. This has not fundamentally changed under Joe Biden. One
reason for this change of course was that curbing global economic imbalances had not succeeded. "America first" is one, unsuccessful answer to this. None of these developments have had any lasting economic consequences.
Corona has changed that. The current globalization crisis is slowing down general economic activities. The pandemic is not yet over. It is also not yet possible to ascertain when the current disruptions can be overcome. What is clear is that the production and logistics networks will work again at some point. But that is no reason to relax. The risks are increasing. There are good reasons to interpret the coronavirus pandemic as a consequence of globalization. The untouched habitats are becoming scarcer along with the risk of an increasing number of zoonoses from wild animals. The global flows of goods and people ensure that epidemics spread rapidly across the globe and become pandemics.
The geo-strategic risks are even more serious. The conflict over Russia and Ukraine, the steadily escalating trade war between the USA and China and the possibility of a renewed presidency of Trump (or a similar politician) in the USA are the most serious. It is hard to foresee how the escalation of just one of these trouble spots will affect the sensitive, highly complex international economic structures. Even the Swift settlement platform (which banks use to process global payment transactions in US dollars), the financial and logistical heart logistical heart of globalization, could be increasingly used as a sanction instrument and lose its function in the long term.
There will be no comprehensive re-nationalization. There must be a reorientation. Local and regional cycles must be strengthened....Through supply relationships, the system must be made more robust. Human rights and ecological requirements must be given much greater weight. The Supply Chain Act is at best a start. Increased regulation must also be applied to global economic relations. The fight against free trade agreements, in which consumer and labor rights, for example, are underexposed, was and is an important part of this debate, even if it has almost completely disappeared from the focus of a critical public.
The importance of containing and curbing globalization is manifest in view of the mechanisms of neoliberal globalization, where cost pressures and the market power of large corporations have driven global inequality. The distribution of income and even more of wealth has become
increasingly unequal in recent decades, and this process has become even more pronounced during the crisis. "Today's current global inequalities correspond roughly to the level of the early 20th century, the height of Western imperialism" (Report on global inequality 2022, World Inequality Lab). The richest 10 percent of the population today hold 76 percent of the world's wealth. The bottom half of the entire population have only two percent of the wealth. The large fortunes in particular have risen sharply in recent years. The share of billionaires as a proportion of total wealth has never increased so much since these statistics began (1995) than in the first year of the corona crisis, 2020. Nevertheless, countries are not defenseless against this. Inequality can be reduced or at least limited by social policy and by strong trade unions and social movements - particularly in economically strong regions in particular. From the point of view of the Alternative Economic Policy working group, too little has been done in Europe and Germany against growing inequality.
The crisis has exacerbated the problem dramatically: "The ten richest people have increased their cumulative wealth since the start of the pandemic from around 144 billion US dollars to around 256 billion US dollars - an increase of around 78 percent. This gain alone is approximately the total wealth of the poorest 44 percent, i.e. around 33 million Germans" (Oxfam 2021). This is a threat both for economic development as well as for the sense of justice. The cohesion of societies and democracy is a central problem. The situation is even more dramatic in countries where deregulation and liberalization policies were very pronounced, resulting in a spectacular increase in inequality. This applies above all to the USA, Russia and India.
The fight against pandemics also suffers from inequality and the asymmetry of power between the rich and poorer countries. While the virus is spreading across the globe in new mutations, vaccination protection in the global South is dubious. At the beginning of the pandemic, many politicians took the view that there could only be protection from the pandemic if all people were protected. Already in the MEMORANDUM 2021, the Alternative Economic Policy working group recognized that this would not happen. In January 2022, over three billion people worldwide were vaccinated twice. However, the vaccination rate in low-income countries (with at least one vaccination) was just 8.9 percent (data published by Oxfam Germany)...
2. slowed economic development in Germany
The economic situation is characterized by uncertainties: the development of the corona pandemic, increasing inflation, concerns about climate change and its consequences. The economy in Germany was also characterized by material shortages or bottlenecks in 2021. According to initial calculations by the Federal Statistical Office from January 2022, the real economic output grew by 2.7 percent. Growth in 2021 was still far from sufficient to counter the sharp slump from the previous year. In 2019, the year before the pandemic, GDP was two percent lower.
The crisis initially followed a V-shaped progression: In the second quarter of 2020, things went into a steep decline that was followed by a rapid recovery. After that, the development was rather sluggish. In the winter months, during which output fell. At other times, it only increased slightly. Over the course of 2021, the unavailability of materials slowed development considerably. The high growth expectations for 2021 could not be realized.
In the years before the crisis, private consumption had become the most important growth factor. This came to an end during the pandemic. In 2020, it amounted to a negative growth of -3.0 percentage points, a significant contribution to the decline in economic output. It did not provide any growth impetus in 2021. Uncertainty about future developments and a lack of consumer opportunities (especially for travel, gastronomy and culture, but also for industrial products that could not be produced due to a lack of parts) have reduced consumption and increased savings to unprecedented levels.
Whereas the savings ratio (savings as a proportion of disposable income) before the crisis (2019) was 10.8 percent before the crisis (2019), it rose to a record level of 16.1 percent. In 2021, it had hardly decreased at 15.0 percent. For recipients of low incomes, the falling real wages (and real transfer payments) have also limited consumption opportunities. Growth impetus came from government consumption, investments, net exports and inventories. Investments are still around one percent below the pre-crisis figure from 2019...
As economic output is still below the pre-crisis level, employment has not yet recovered either. Although it has increased by 7,000 people compared to the crisis year 2020, this means a decline of more than 360,000 people compared to 2019, . In view of the severe crisis, however, this is a fairly moderate decline. There have been major shifts within the labor force. The losers were the self-employed, particularly from the gastronomy sector, culture, tourism and physical services, and the marginally employed. Their number has increased by more than half a million compared to 2019. In contrast, the number of employees subject to social security contributions was almost 400,000 higher in 2021 than before the crisis. In principle, the Alternative Economic Policy working group sees a structural shift from marginal to social insurance. Employment subject to compulsory insurance is a positive trend. However, many people who rely on the income from a mini-job have no chance of finding employment subject to social security contributions and will be left without a corresponding income.
3rd labor market still in crisis
The labor market remained in crisis mode in 2021 (all data from the statistics of the Federal Employment Agency, Focus on the labor market, December 2021). Compared to 2020, the number of officially registered unemployed fell only slightly by three percent to 2.61 million. Compared to the pre-crisis year of 2019, this represents an increase of 347,000 or 15.3 percent. The unemployment rate in relation to the dependent civilian labor force fell slightly from 6.5 to 6.3 percent.. In 2019, it had still stood at 5.5 percent. In eastern Germany, it amounted to 7.9 percent in the year 2021.
Different groups were affected very differently by unemployment. For men, the rate was slightly higher at 6.0 percent than for women at 5.4 percent (all data on unemployment rates by group of persons refer to an all civilian labor force). Non-Germans are particularly affected with a rate of 13.7 percent, while the figure for Germans is 4.9 percent... Without vocational training, the unemployment rate is 20.6 percent, with vocational training at 3.5 percent and with academic training at 2.4 percent. These figures also reflect the division of the labor market with high unemployment on the one hand and a shortage of skilled workers on the other, for example in the care sector and in the skilled trades.
On average in 2020, almost three million employees worked short-time (at the peak in spring it was almost six million). This was by far the highest figure in the history of the Federal Republic of Germany. In 2021, the number had fallen to 1.85 million. There were still many more short-time workers than during the global economic and financial crisis in 2009, when the figure was 1.14 million. Taking short-time work into account, the Federal Agency put underemployment for the year 2021 at 4.27 million people. A slight easing on the labor market was also due to the reduced supply of labor. Due to demographic change, there are fewer and fewer people of working age. Due to migration and the growing labor force participation of women, this effect has been largely offset in recent years. During the crisis, both developments weakened significantly, so that on balance, the labor supply in 2021 declined by around 120,000 people. Overall, there was significantly less movement on the labor market than in normal times. In 2019, there were still over 7.2 million people on the labor market. In 2021, there were 5.8 million new million entries and 6.2 million exits... These are the worst figures since 2009. The lower employment opportunities have led to a consolidation of unemployment. The number of long-term unemployed (unemployed for more than twelve months) rose sharply for the first time in years. It increased from 727,000 in 2019 to slightly more than one million in 2021, an increase of 300,000 or 41 percent in just two years. This means that after 32.1 percent in 2019 and 30.3 percent in 2020 (the increased number of unemployed people overall led to a decrease in the proportion of long-term unemployed unemployed), 39.3% of all unemployed people had been longer than one year out of work. This discrepancy between the shortage of skilled workers and rising unemployment shows how segmented the labor markets are. An active labor market policy is indispensable...
Short-time work was extremely important for employees. The payments also benefited companies. They were able to significantly reduce their wage costs during the crisis without losing qualified employees. In many cases, this saved the existence of companies. However, even highly profitable companies have also benefited from short-time working, allowing them to increase their returns.
Supply problems are also driving inflation
For many years now, excessive price increases have no longer been a problem for many economies...In Germany, the increase in consumer prices since 2012 has always been below the target inflation rate of the European Central Bank (ECB) of two percent. This changed in 2021.
The globalization crisis has also left its mark on the price structure. The shortage of supply due to the disruption of global supply chains has led to significant price increases. In Germany, this is reflected in higher import prices. Import prices rose 24 percent in December and 13.5 percent for the year as a whole.. Energy in particular rose dramatically. Import prices for natural gas increased in December 2021 compared to the previous month, by 267.5 percent, for hard coal by 154.3 percent and for petroleum products by 68.5 percent. However, other raw materials also rose sharply. Import prices for pig iron, steel and ferrole-alloys rose by 60.5 percent. Not only the import prices for raw materials rose sharply: Intermediate goods also rose by 23.0 percent (all figures from the Federal Statistical Office, price indices for imports).
Import prices also contributed to inflation in Germany, where consumer prices rose by up to 5.3 percent in December compared to the same month in the previous year. The average inflation was 3.1 percent...
So far, the ECB has reacted rationally to rising inflation. At the same time, it is under considerable political and public pressure exacerbated by the more restrictive monetary policy of other central banks. Many commentators are once again following the old monetarist way of thinking, according to which expansionary monetary policy is responsible for the price increases. However, in view of the clear causes of the upward price trend this argumentation is completely in vain. Here the ECB takes a clear position, which is shared by the Alternative Economic Policy working group: "What can the ECB do about it? Can we eliminate supply bottlenecks? Can we transport containers, lower the oil price or pacify geostrategic conflicts? No, We can't do any of that" (Christine Lagarde, Frankfurter Rundschau,11.02.2022). Rising interest rates under such conditions would only lead straight into a new recession. That would be a dangerous and completely wrong policy.
Source: Federal Statistical Office, provisional value for January 2022...
5th coalition agreement - Daring to make more progress?
The major project formulated in the coalition agreement gis the ecological transformation. In fact the agreement means progress in some areas. However, there is no discernible realignment.
Taxation
There is no movement at all in tax policy. The wealth tax will still not be levied, and inheritance tax remains - especially for business assets - remains more of a petty tax. Also the completely outdated splitting of spouses is not touched. The opportunity to create more tax justice
and additional revenue for the ecological restructuring, the resolution of the investment backlog, a more efficient public sector and better social security thus remains unused. The new federal government is thus making no contribution to reducing inequality in the income distribution via a changed secondary distribution. A genuine "Alliance for justice", as the subtitle of the coalition agreement definitely looks different.
Borrowing
The other source of funding alongside taxes is borrowing. Here, the new federal government is continuing to shackle itself: The debt brake is to remain in place and be adhered to again from 2023.
The Alternative Economic Policy working group has explained the nonsensical nature of the debt brake in detail in many MEMORANDUMs. The financing basis for "a decade of investment in the future" (coalition agreement, p. 24) thus remains difficult. Nevertheless, a series of measures are intended to create financial leeway:
- Unused credit authorizations from the year 2021 amounting to 60 billion euros are to be
into a climate and transformation fund;
- A repayment of the corona debt now stretched over 30 years,
- Change to the economic adjustment procedure of the debt brake;
- Use of public corporations and companies for companies for investment financing and
greater use of the KfW;
- Reduction of subsidies and budget restructuring;
- increasing tax revenues.
Some of the points are clearly a softening of the debt brake. It is of course to be welcomed
if urgently needed revenue can be increased. It lacks any logic when a federal government
government sticks to the debt brake because it has supposedly proved its worth, and at the same time waters down the debt brake with its own policies.
The Alternative Economic Policy Working Group calls for the abolition of the debt brake and a return to the golden rule (net investments are financed by borrowing). If this is not possible because there is no constitutional majority for this, it must be consistently reformed....
The costs for the ecological conversion are not even taken into account here, just like expenditures for a better healthcare system with better care, more teachers, etc. The working group Alternative Economic Policy has been calling for years for a future program of at least an additional 120 billion euros annually.
Minimum wage and low wages
The low-wage sector has grown in recent years despite good labor market development, rising real incomes and falling unemployment, the low wage sector has been reduced only slightly. It reached its highest level in 2011 with 24.1 percent of all employees, stagnated at around 23% until 2017 (IAQ Report 5-2020) and fell to 21% by 2021. The traffic light coalition wants to change this. As of 01.10.2022, the statutory minimum wage rose to 12 euros per hour.. This is a great success for the broad movement that has been fighting for an adequate statutory minimum wage since the mid-2000s. The Alternative Economic Policy Working Group has also repeatedly campaigned for this since 2006...
Collective agreements must therefore be easier to be declared generally binding so that they apply to all companies in the sector... The de facto veto right of employers should be abolished. In addition, the special social law regulations for mini and midi jobs must be abolished...
Health and care
The pandemic has once again highlighted the special importance of the healthcare system. The coalition agreement has some bright spots for the health care system, for example where the hut is literally on fire, so that real improvements can no longer be put on the back burner. Progress can be expected when it comes to the nursing staff, primarily in hospitals. However, the very question of whether the massive backlog in international comparison is to be reduced more than just a little is not clearly answered. The coalition agreement contains promising keywords, but these remain undefined. The decisive factor will be the implementation...
Germany has the second most expensive healthcare system in the OECD... Setting a new course with the aim of the dominance of special economic interests and establishing public control from the perspective of patients and those in long-term care are not planned. This would have required a paradigm shift paired with a strong political will to shape the future. The many individual elements remain rooted in the paradigm of a competitive organization, where the promise of health can and should be used to generate good. However, this means that the new accents are somewhat up in the air. As part of an overarching and financially underpinned overall strategy, they could lay the foundation for necessary changes of course. Whether this will happen is questionable, however. An overall strategy with financial backing would be required... The unresolved question of financing thus becomes one of the pitfalls, as contributions are to remain largely stable, taxes are not to be increased, and redistribution within the system is also not being considered. For implementation of the forward-looking and positive accents, this is likely to prove a heavy burden.
Energy transition
The coalition agreement sets ambitious targets for the expansion of renewable energies. On one hand, the electrification strategy may lead to social acceptance problems... The coalition agreement sets out the following concrete goals
- By the year 2030, with a projected gross electricity demand of 680-750 terawatt hours, 80 percent from renewable energy.
- With the 30 gigawatts of offshore wind and 200 gigawatts of photo-voltaics, this requires a capacity of 100-125 gigawatts of onshore wind.
- In the "National Hydrogen Strategy" - with priority for the domestic production of green hydrogen - the national electrolysis target is to be increased from 5 to 10 gigawatts by 2030.
The Alternative Economic Policy working group criticizes that the coalition agreement only deals with the topic of energyand material efficiency is only dealt with in passing and the the link between climate and resource protection policy is practically ignored.
Pension policy
The assessment of pension policy in the coalition agreement is also contradictory... The doors for a pension insurance that protects pensions from the turbulence and risks on the international stock markets, which can go as far as a crash, are thus opened...
The Riester pension is not to be abolished, but (supposedly) made more attractive by (supposedly!) dispensing with payment guarantees. Consideration is being given to employees to make additional private provision. This would be financed by the employees alone and without the employers. This is a continuation of the idea of filling the gaps in the statutory pension insurance through these benefits. The parity contribution payments are replaced by private payments. This does not reduce the overall burden - but increases the burden on employees. The introduction of a citizens' insurance is not provided for in the coalition agreement. The Alternative Economic Policy Working Group demands:
- The debt brake must be abolished. Should this fail due to the high constitutional hurdles, reforms are necessary to ensure sufficient and counter-cyclical financing of the public budgets.
- If the debt brake is maintained. financing the burden of the crisis via a one-off levy on assets as Corona burden equalization is necessary.
- A fairer tax system with higher revenue to finance public expenditures must be introduced. This includes a wealth tax, a financial transaction tax and prevention of tax evasion and tax avoidance and corporate tax planning as well as the gradual abolition of tax splitting for spouses.
- At the European level, the fiscal rules are being abolished or at least comprehensively reformed. The resilience and recovery fund will be developed into an instrument.
- A comprehensive investment and spending program for the areas of education, transport infrastructure, digitalization, municipal spending, energy-efficient building, building refurbishment, social housing, local care infrastructure and for the labor market and qualification must be drawn up.
- There must be social compensation for rising CO 2 prices.
- The special regulations for mini- and midi jobs will be abolished.
- The social insurance systems are to become a citizens' insurance scheme.
6. for ecological restructuring: Entry into a circular economy
The Alternative Economic Policy working group sees the need for an integrated climate and resource protection policy. The real drama of the upcoming accelerated de-carbonization of the entire global economy and the serious problems to be solved are only now becoming clearer. If the current trend continues, the global economy will be heading towards a state of catastrophic overuse of natural resources.
At the same time, according to the current scenarios of the IPCC, irreversible climate change processes are probable. Climate change, the overloading of the atmosphere and the scarcity of resources are mutually reinforcing global crisis accelerators. For this reason alone, integrated political solution strategies have the highest priority. The United Nations Environment Program (UNEP) and the International Resource Panel (IRP) have determined that a total of around 90 percent of the loss of biodiversity and 50 percent of climate change are causally linked to the extraction and processing of natural resources.
Achieving a more ambitious climate and resource policy will be easier if it is not a two-track approach (first climate and then resource policy) but instead, strategic measures, funding programs and projects are integrated, designed and implemented as far as possible. Through targeted resource efficiency policies and through a consistent circular economy, an (absolute) decoupling of material flows from economic development can be achieved. This means that a consistent resource conservation policy would also make a significant contribution to climate protection.
The cumulative greenhouse gas emissions could be reduced by the year 2050 by 20-50 Gt CO 2 -eq (residential buildings) and 13-26 Gt CO 2 -eq (passenger cars) through higher yields, resource-efficient design, material substitution (e.g. concrete with wood), extended product life, higher utilization efficiency, reuse and recycling.
The main factors for a decline in demand for raw materials are, according to the Federal Environment Agency overall for all sectors:
- the substitution of fossil raw materials with renewable energies and in part by synthetic raw materials;
- the substitution of primary raw materials by biotic raw materials, by lighter raw materials and/or by secondary raw materials;
- increasing material efficiency in industries and services;
- the use of resource-saving technologies and extending the service life of products.
Against this backdrop, the principle of "Energy Efficiency First" (IEA Paris) should become "Energy and Resource Efficiency First", i.e. a more comprehensive "economy of avoidance", should be generalized. The relevance of this is obvious: There is no more effective means of curbing further price increases energy and raw materials than through a veritable energy and material efficiency revolution. An "economy of avoidance" is not to be understood as an economy of scarcity, but as a strategically oriented avoidance of unnecessary energy and resource consumption.
The average share of material costs of the gross production value in the manufacturing industry in Germany has risen from around 38 percent (1993) to around 47 percent (2008) and then fell again to around 43% by 2017... Two main conclusions can be drawn from these figures
conclusions can be drawn: Firstly, the reduction of material costs is essential for the international competitiveness of industry...
The basic principle is neither new nor particularly surprising. Instead of producing products at great expense, products and the raw materials they contain should be used for as long as possible and then fed into high-quality closed cycles. The idea sounds simple and convincing, but its implementation requires fundamental and coordinated changes to entire value chains. The question of whether and, if so how this can be implemented under the conditions of capital utilization requires further analysis.
Even at the product design stage, it is important that business models should also be designed so that products do not break down as early as possible, forcing consumers to spend money on replacements. It goes without saying that recycling processes should also pay much more attention to the quality of the secondary raw materials obtained at the end so that the industry can reuse them without any loss of function.
In order to establish new, circular business models, hopes are pinned above all on the idea of so-called product-service systems...In such systems, the manufacturer has a clear economic incentive to make his washing machine as durable and repairable as possible.
According to calculations by the Wuppertal Institute for Climate, Environment and Energy, the use of high-quality technologies could save a total of 109,000 tons of lithium, 180,000 tons of cobalt and 576,000 tons of nickel by 2050. These quantities correspond to a market value at today's prices of around 13.8 billion euros at today's prices. As early as 2029, over half a million electric vehicles in Germany will reach the end of their service life phase - without any clear guidelines for the development of a corresponding collection and recycling structure. In addition, there are
strategies of individual manufacturers as to whether such batteries should be recycled directly or alternatively reused. This example illustrates the variety and complexity of issues that arise when implementing recycling-oriented concepts in practice.
- Global producer responsibility:manufacturers must bear the costs of recycling.
- Resource tax: Similar to the CO 2 taxation, the consumption of raw materials is also taxed. This will make recycling much more economically attractive. A first step would be to abolish environmentally harmful subsidies for the use of raw materials.
7. for ecological restructuring: Industrial policy
The scale of the challenges is now largely undisputed. The German Bundestag set the goal of the target of climate neutrality to the year 2045 and increased the interim target for 2030 from 55 to 65 percent greenhouse gas reduction compared to the reference year 1990 following the renewed, even more dramatic warnings from the Intergovernmental Panel on Climate Change (IPCC) and under pressure from the Federal Constitutional Court in June 2021. The industrial sector should and must reduce its emissions by at least 36.6 percent compared to 2020.
This requires a comprehensive restructuring of the entire German industry landscape. According to calculations by Prognos/Öko-Ins-tute/Wuppertal Institute - after the energy industry - transport and industry must make the biggest contributions to reducing CO2-emissions by 2030 and, within industry, the steel and chemical industries.
Germany is one of the few developed capitalized countries in which industry continues to play a key economic role. At the same time, Germany's significant potential in terms of expertise and manpower and the continued important influence of trade unions and works councils in parts of industry, Germany has comparatively good challengers. This is not just about the energy efficiency of production, but also that of the products and their use...The urge for growth inherent in capital utilization must ultimately be reduced.
The sufficient availability of green electricity is the basic prerequisite for all plans to de-carbonize industry and the transport sector. The massive acceleration of green electricity expansion is the fundamental prerequisite for this, that the switch to hydrogen actually leads to CO 2 savings for the chemical and steel industries in particular. This will also require a rapid expansion of the infrastructure (power lines, hydrogen networks, etc.). A socio-ecological transformation of industry includes the effects of the rising CO2 price on consumer prices and the costs of individual mobility. But it also includes the security of existing jobs and also the social security in the event of transitions to new employment within and between companies or even industries. In a medium to longer-term perspective, it must also be taken into account that the workers will be prepared for this in the education and training system. The socio-ecological transformation of industry therefore requires a generational program. Estimates of the net job effects vary greatly and are still subject to great uncertainties. What is clear, however, is that the structural changes will have very different employment effects by sector and region. In the short to medium term, this can cause major upheavals in regional development. On the other hand, it can also be assumed that the periods in which positive or negative effects are to be expected will be very different.
Many companies that will be massively affected by the transformation of industry, have so far prepared themselves insufficiently or not at all. This applies above all to training as an important adjusting screw for both internal and inter-company reorientation. In the upcoming upheaval
situation, large parts of the workforce will need to be retrained in a relatively short time. Larger companies are quite capable of doing this. They later benefit from the returns of the transformation. Financing these investments is also one of their tasks in terms of public policy and should not be subsidized by public funds. Small and medium-sized enterprises, on the other hand, are dependent on external offers. They should be financially supported by the Federal Employment Agency.
In order to be able to cope with structural change, the fastest possible placement in each available job as quickly as possible is the top priority of labor market policy... Further training must take priority over rapid placement. The coalition agreement must also be implemented. In the course of the socio-ecological transformation of industry, a comprehensive change of activity will be more frequent than before. One obstacle to a socio-ecological transformation is the dualization of the German labor market. At the beginning of the 1990s, 85 percent of all employees were paid according to collective agreements. Today it is only 53 percent. This high protection gap is particularly noticeable in the case of involuntary changes of company... According to the working group on alternative economic policy, the social and ecological transformation of industry can be managed. The set of instruments required for this can be realistically described. The state has a lot of responsibility here, but the active and diverse participation of companies in the transformation in terms of labor policy will be of decisive importance. Trade unions and works councils can and must play an active role at the industry and company level for which they need more rights and powers.
The trade associations have formulated a number of basic demands for the success of the transformation to the German government and the EU Commission:
1. the availability of large quantities of green and cheaper electricity;
2. the provision of the necessary infrastructure for this (and for green water necessary infrastructure (and for green hydrogen);
3. the financial promotion of research and product/process innovations;
4. protection against price dumping in foreign trade;
5. financial relief in the process of transformation process to secure international competitiveness;
6. planning security for long-term effective investment and investment and product decisions.
The first two points in particular are among the elementary technological and economic prerequisites for a socio-ecological transformation of industry. The third point, the state funding of research and innovation, is fundamentally undisputed. This is part of a renaissance of industrial policy initiated by the previous government in individual areas and to be continued by the new federal government. The profits from innovations achieved through public funding are to be socialized...
The Alternative Economic Policy Working Group demands that necessary subsidies from public funds be linked to conditions imposed by the state that must be met by the companies concerned in return. The most important condition is that the companies concerned need these public funds... The permanent expansion of public investment creates a good basis for planning security... Through the investment, the federal government can participate in the returns in the future, build up and avoid socializing costs and privatizing profits. At the same time, the government can influence the implementation of the climate targets and demand the participation of trade unions.
The Alternative Economic Policy Working Group policy demands:
- A bundle of labor policy measures for a successful socio-ecological transformation. These include career guidance during career development, grants for skilled workers for training in shortage occupations (expansion of the adult student grant) and the establishment of a
short-time working allowance.
- Transfer companies can be a further bridge to new employment which can reduce possible unemployment by up to twelve months without affecting entitlement to unemployment benefits. This time can be used for further training and placement.
- Reduction in working hours for transformation. Many collective agreements now offer the possibility of temporary reductions in standard working hours (albeit only occasionally with partial wage compensation).
- Creation of a credit-financed transfund in the amount of 120 billion euros. Instead of loans, the fund acquires shares in the companies. The business policy is actively shaped.
- An active regional structural policy organized with the participation of transformation councils.
- Expansion of collective bargaining coverage through a reform of the declarations of general applicability (the veto right of companies must be abolished) and comprehensive collective bargaining laws.
- Expansion of co-determination in companies: The democratization of the economy is an important prerequisite for ensuring that employees are involved in the selection and introduction of new technologies and in assessing the consequences for work organization, working conditions or qualification requirements. A minimum requirement is the model of VW, where important decisions in the Supervisory Board are made with a two-thirds majority (which effectively gives employees a veto right).
8. for the ecological conversion: Hydrogen economy
In addition to phasing out fossil fuels, developing a completely regenerative energy and energy saving, the Alternative Economic Policy working group sees the use of hydrogen and its derived products as an important element in the de-carbonization of the economy. The use of hydrogen will have to play a central role:
1. where the significantly more efficient direct or battery-supported use of electricity would only be possible at enormous expense (for example in air and maritime transportation), hydrogen can be used via fuel cells or via liquid or gaseous fuels as so-called synthetic fuels (synfuels).
2. hydrogen will also serve as a long-term storage medium, especially to secure the energy supply at those times when there is no wind blowing and the sun is not shining ("dark doldrums").
3. hydrogen is needed for material processes in industry, e.g. in steel production.
4. carbon compounds produced from hydrogen and carbon hydrogen compounds can replace natural gas and crude oil in the chemical industry.as a basic material.
All of these applications - if they are to be sustainable - are based on hydrogen, which is obtained from electrolysers using green electricity and, if necessary, combined with carbon. That hydrogen will become the "oil of the future" is nevertheless doubtful. The production of green hydrogen is extremely energy and cost-intensive. If hydrogen is not used in its pure form but is incorporated with carbon into liquid or gaseous substances, these processes require additional large amounts of energy... Priority must always be given to direct electrification and energy saving.
The German government's "National Hydrogen Strategy" was adopted on June 10, 2020 by the then coalition of the CDU/CSU and SPD. The new traffic light coalition is building on this. It also wants to establish hydrogen technologies in order to decarbonize production processes. To this end, the regulatory conditions are to be created for the market ramp-up, research and development as well as technology exports related to hydrogen technologies...
9 A strong public sector needs personnel
The view of the ailing infrastructure and the need for ecological conversion have made the need for higher (especially public) investment. almost a common good. There is not only a lack of investment in our community. There is also a massive lack of staff in the public sector in
Germany. The background to this shortage is the 1990s in the public sector, which was characterized by a systematic denationalization policy. This made even core state tasks such as security and education policy problematic. The negative consequences of this policy are unmistakable today and affect many areas of social life.
Care and nursing services are particularly affected by staff shortages. The corona pandemic has once again impressively confirmed this, just like the deficits in the healthcare system as a whole and in the health authorities. A lack of capacities in the education sector has long been
lamented, particularly for the ecological conversion, further training and retraining. The entire cultural sector has suffered consequences of the pandemic and is still suffering. The expansion of the public cultural infrastructure would be a great help here. But it affects many more areas.
For example, funds made available for public investments cannot be called up because (especially in the municipalities) the appropriate supervisory and planning personnel to implement the investments are lacking. The list could be extended endlessly.The Alternative Economic Policy Working Group has repeatedly dealt intensively with the need to expand the public sector. One example of this is the MEMORANDUM 2017 (Chapter 4: Public service - shortage management or expansion, p. 169ff.).
In order to estimate the extent of the shortage of staff in the public sector, a study by Heintze, Ötsch and Troost (Die Beschäf- tigungslücke in der sozialen tigungslücke in der sozialen Infrastruktur, 2020) is recommended for the areas of childcare, education. health and social services and cultural services. The starting point of the study is the significantly better staffing levels in the Nordic-Canadian countries.
While in Germany, the public service currently employs 58 people (full-time and part-time) and a total of 74 people per 1,000 inhabitants, more than twice as many people work in the public sector in the Scandinavian countries. Of course, there are limits to such a comparison. Many social and health services in Germany are traditionally provided by church and non-profit organizations.
Many areas (rarely to the benefit of the quality of the services provided and not always cost-efficient) are taken over by private, profit-oriented companies. Nevertheless, such a comparison provides a certain orientation to be able to quantify the uncovered needs.
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The staff shortage identified in the study focus on public and public welfare-oriented services in the area of childcare alone - from nurseries to childcare alone - from day nurseries to after-school care centers - a good 400,000 more full-time pedagogical staff. The areas of administration, catering, cleaning, supervision, etc., reveal the potential for additional employment. There is a shortage of staff in the education sector: schools, universities and further education. With a view to specific needs - such as pedagogical all-day schools that meet educational standards, better childcare conditions, more school social work work and inclusion - a potential of several hundred thousand full-time positions appears. In the area of health and social services, there is a considerable unmet need for personnel in hospital and geriatric care. In nursing care it amounts to at least 100,000 full-time employees; in nursing care for the elderly it is even higher.
© March 2022 Alternative Economic Policy Working Group. The long version of this text contains detailed explanations of the most important statements. The MEMORANDUM 2022, i.e. the short and long version and the list of supporters, will be published as a book at the end of April 2022.
Hundreds of thousands of additional personnel are needed that will rise sharply in the future. There is also a significant need in the area of cultural projects. This represents more than 100,000 jobs. A major role would be played by professionally run public libraries and meeting places.
Overall, the study estimates the additional potential of well over one million to almost four million additional employees. More public services and employment are necessary to strengthen social cohesion and to eliminate the shortages and meet the needs and requirements of children
the needs and requirements of children, the elderly, the sick and the entire population in the central areas of social reproduction. Additional jobs would be created to compensate for employment losses due to the socio-ecological transformation.
10. awakening needs a new policy
The challenges facing society are becoming greater. Globalization is in crisis and needs to be realigned. The gap between rich and poor remains huge, and the crisis has exacerbated it. We are increasingly recognizing the extent of the socio-ecological transformation required to contain the crisis, which requires enormous social adjustments but must not further exacerbate the social divide. The social security systems do not currently offer sufficient protection. The greater the gap between these challenges and the actual actions of politicians, the more trust in democracy dwindles - especially in a society exhausted after two years of the pandemic.
With its coalition agreement, these challenges will finally be tackled. But the financial foundations, restructuring of the tax system, have not been laid. The financial basis for a major new departure, the necessary new policy remains halfway and is falling short. The house does not have a stable foundation. Big challenges also need big programs. The Alternative Economic Policy working group has always formulated them. It was often ridiculed for this in the past. The need for huge investment programs is no longer in doubt. The Alternative Economic Policy Working Group has persistently argued for many years that such programs are necessary. Such programs must come from the state. But that is only half the truth. The great social upheaval, especially the socio-ecological transformation of industry, is a social task and must be driven forward by social actors. The necessary development of concrete concepts required for this cannot be delegated to government agencies even if it requires comprehensive support from these agencies. Conversely, the state only becomes only becomes capable of acting when it can rely on this commitment of social actors.
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Original: Memorandum 2022 and Memorandum 2023