According to calculations by the Kiel Institute for the World Economy, the potential volume of work will fall from 2024.
(Photo: dpa)
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There are many indications that 2022 will be a good year for the economy. The recovery from the corona shock continues, financial and monetary policy remain expansive despite increased inflation rates, perhaps at a somewhat slower pace in the USA.
The decisive factor, however, are the medium and long-term prospects, which are darkening. This knowledge is often suppressed.
To Calculations by the Kiel Institute for the World Economy the potential volume of work will fall from 2024 onwards. According to this, potential growth in Germany will already be 0.9 percent in 2026, i.e. 0.5 percentage points below the long-term average.
What sounds harmless has considerable consequences: The demands of the non-employed part of the population are increasing significantly faster than the economic performance of the other part.
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The researchers hope that real wages will rise and, as a result, slightly higher productivity gains. However, these will not be sufficient to compensate for the further accelerating decline in the labor force in the following years. The gap between aspiration and performance potential is also growing as a result of the targeted conversion towards climate neutrality, because only a fraction of the expenditure required for this is likely to increase the production potential of the economy.
Daniel Stelter is the founder of the discussion forum beyond the obvious, which specializes in strategy and macroeconomics, and is a management consultant and author. Every Sunday goes up www.think-bto.com his podcast online.
(Photo: Robert Recker / Berlin)
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Double annual production growth
Translated, this means nothing other than that the consumable part of the national income will decrease and also be significantly more controversial. A scenario that promises strong social tensions, even if – as has already been foreseen – a large part of climate protection expenditure is financed with loans and fresh money from the European Central Bank (ECB).
Compared to the pre-Corona period, we would have to double the annual productivity growth to compensate for the decline in the workforce. A real show of strength, the sooner we tackle it, the more likely it is to be successful.
There are enough starting points: a significant increase in the quality of education, a reduction in the number of early school leavers and people without vocational training, lifelong learning, upgrading of vocational training, focus of academic education on the MINT subjects, significantly more public investments and improved incentives for private investments.
In part, the new federal government has taken up issues such as underlining the commitment to more investment and the national target value for research and development expenditure. But that is by far not enough.
If we are serious about securing prosperity, politically uncomfortable issues must also be addressed, especially in the field of education. Demanding and promoting is essential, especially with a view to the cohort of young people without vocational training.
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