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Will we have to work more, Economist?
A daily chat about tomorrow / #23
P: Good morning, Economist.
E: Good morning, Photographer.
P: I want to talk to you about old age.
E: If need be.
P: I have read that in Germany, 400,000 more people leave the labour market each year than enter it.
E: Demographic change is beginning to hit.
P: Meanwhile, Germany is debating whether the 4-day week should be introduced. That sounds a bit absurd, doesn't it? The Germans are running out of workers, and those who work should work less.
E: If you just put these two facts in front of each other, it sounds really absurd.
P: Isn't it like that?
E: Since industrialization, we have used technological progress for more prosperity AND leisure time. We tend to work less and still have more goods and services at our disposal. A beautiful thing, isn't it?
P: But not in times when there are more and more old than young people. We need laws that make people work. Who else is supposed to pay all the pensions?
E: The Photographer becomes authoritarian.
P: The Photographer is realistic.
E: And I'm liberal. The liberal puts the focus on the individual rather than group interests. And from that perspective, incentives to work more are problematic.
E: It is advantageous for society if as many people as possible work as much as possible. This not only benefits those whom the people are working for but also society as a whole in terms of high tax revenues and filled social security coffers. The individual, on the other hand, weighs things up: They also want to work, at least because they need money, but they also enjoy free time. If society determines the law, it will make people work more than the individual would like.
P: What to do?
E: The state should not induce people to work more or less. It should simply be left to the individual to decide.
P: So you're also against a legal four-day week?
E: I am.
P: Next time, you tell me straightaway.
E: And even more. In the past, we have put the incentives more in the direction of non-work, which means we have privileged leisure time. Both when starting work, often lower paid, and for the middle class in work. In the former group, full social security contributions are due from the first euro earned, and state support falls far too quickly when someone comes out of non-employment. Then work is hardly worth it. And in the middle class, our progressive tax system makes working more unattractive.
P: What to do?
E: I think we need fundamental changes. Social security is financed mainly through work, and large parts of state revenue are funded by progressive income tax.
P: You mean we have to exempt work from taxes and duties?
E: We have to.
P: Sometimes I think you're a real revolutionary economist, Economist.
E: Sometimes I think there's a little authority leader in you, Photographer.
P: We are more than we think. Have a nice day, Economist.
E: You too, Photographer.
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