In recent months, the USA has known exceptional tensions: the country has experienced outbreaks of violence and is deeply divided. On January 15, President Joe Biden announced his $1.9 trillion COVID-19 stimulus plan titled the “American Rescue Plan”. He described it as an emergency package to face the nation’s economic difficulties and health-care needs.
Jobs and unemployment
When we see social interactions that seem unfair, people usually demand legislation that would prohibit the behavior they dislike. But this kind of intervention does not come without a price and has unintended consequences.
On October 28th, the European Commission initiated a legislative procedure to ensure “adequate minimum wages” across the EU member states in response to the coronavirus pandemic. The Commission thought that this would help the workers affected by the crisis. The proposed legislation would require that EU countries set their minimum wages by taking into account a number of national parameters, such as the cost of living, house prices, and GDP per capita.
In the 2000s, a short book by philosopher Harry Frankfurt made the term ‘bullshit’ socially acceptable. In 2018, anthropologist David Graeber published his bestseller, in which he argued that roughly half of the employment relations in the Western economies are ‘bullshit jobs’: they provide no benefits to society and their purpose remains unclear even to those employed. Graeber’s hypothesis received much praise. After all, it addresses widely spread stereotypes about the alleged uselessness of well-payed jobs in the service sector, for example in marketing, management or consulting.
Germany’s labour market is buzzing. The unemployment rate is currently close to 5%. Although the business cycle could cool down in the near future, the trend is not expected to reverse course in the coming years. In the long run, however, pessimism dominates. As automation intensifies, many observers expect an era of mass unemployment in which only highly-qualified skilled workers will have a regular employment contract. At the same time, baby boomers will retire, and the decreasing labour force might lead to a skilled labour shortage, lower growth rates and an overburdened welfare state.
Yet, empirical findings and theoretical arguments suggest that there will be neither mass unemployment, nor a dramatic skilled labour shortage. Moreover, these two problems will certainly not emerge together. Rather, the decrease in labour demand due to automation will be manageable, and partly absorbed by the simultaneously drop in the labour force. By contrast, increasing income inequality is more likely to become a key isuue.
For several decades, labour market experts and economists have been advocating what now seems to become real: in 2020, Germany’s new immigration act will come into effect. The ‘Skilled Immigration Act’ is supposed to make immigration of qualified, non-EU citizens significantly easier. In the future, qualified workers without academic degrees will have immigration opportunities which were previously open to university graduates only. Moreover, they will no longer be legally at a disadvantage compared to German nationals and EU citizens.
«From now on our nation’s answer to this great social challenge will no longer be a never-ending cycle of welfare: it will be the dignity, the power, and the ethic of work. Today we are taking an historic chance to make welfare what it was meant to be: a second chance, not a way of life…The new bill restores America’s basic bargain of providing opportunity and demanding in return responsibility».
Since the introduction of the Pharmaceutical Tariff Elimination Agreement in the early 2000’s, the trade of pharmaceutical goods between the EU and US has been conducted mostly without the hindrance…
Immigration is a highly contentious topic in modern societies, with almost all of the different regimes across the OECD showing failures on some measure. As populist responses increase to rising…