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27 april 2015

German Labor Market Outlook

2015 will be a year with many challenges and interesting new developments. Company restructurings announced in 2013 and 2014 will probably materialize in job losses of increased magnitude, even though the overall positive labor market outcome is expected to continue. Collective bargaining in an environment of low unemployment, sporadic skills shortages and near-zero inflation may bring considerable real wage increases. The implementation of a statutory minimum wage will be a substantial paradigm shift in German wage setting and industrial relations. Intended bargaining consolidation legislation will remain contested and may finally be frustrated as public discourse reveals the potential consequences in detail; alternatively, legislation may be passed and would then certainly be challenged in the courts in years to come. Long-term unemployment will continue to be a stain on the government's favorable employment record; however, fundamental new initiatives in employment policies are not to be expected before the next government takes office in the autumn of 2017. 

The full article of Matthias Knuth can be found here.

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