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The German labour market generally needs to be more dynamic. In order to further dismantle unemployment on a sustainable basis and break down structural rigidities on the labour market, the reform pathway in place has to be followed resolutely.

Not least in light of the forward march of globalisation, a growing need for skilled workers and demographic change, a flexible labour market and better exploitation of domestic labour resources are being increasingly important. In this regard, BDA works in particular for a higher participation rate of women and older workers on the labour market. Furthermore, however, Germany also needs qualified immigrants from abroad as well as a modern immigration system geared to labour market needs.

An essential element for a dynamic employment situation is a consistent focus of social protection for the unemployed and employment promotion on a rapid reintegration in the world of work. First correct reforms in unemployment insurance, the merger of unemployment and social assistance in welfare and unemployment II, the progressive reorientation of labour market policy as well as the far-reaching overhaul of the German employment office started in 2002 show that policy-makers are slowing coming to the realisation that there is no alternative to employers’ concepts for reform. Nevertheless, the German system of social benefits for the unemployed and active employment promotion financed out of tax and social insurance is still not optimally geared to ensuring a rapid match between supply and demand on the labour market. There is no alternative to further reforms on the labour market and establishment of a conclusive concept for more growth and jobs if the goal of full employment in Germany is to be achieved.

Rapid inclusion in new employment

BDA wants social protection for the unemployed in a flexible labour market to be shaped in such a way that individual responsibility and mobility are reinforced. To that end, what is mainly needed is a stronger concentration of unemployment insurance on basic protection financed out of social insurance contributions as well as markedly better activation and intermediation of low-skilled workers and the unemployed in the area of welfare and unemployment II. The right to social benefits under unemployment insurance and out of the general budget must not only provide appropriate social protection but also be structured is such a way as to promote employment.

Social protection should not encourage beneficiaries to continue receiving transfer payments but give targeted intermediation for rapid inclusion in new employment. It is necessary to provide the unemployed with professional and personalised intermediation tailored to needs on the labour market. In addition, it is important to give people effective support when they return to the labour market when intermediation fails to lead to a new activity immediately. A fundamental condition for the success of training and qualification measures as well as mobility support is that employment promotion instruments are deployed efficiently and in a targeted way. To that end, labour market policy must concentrate on instruments that proved effective at securing integration and on using resources consistently as a function of their effect and cost-effectiveness.