The Federal Ministry for Economic Affairs and Energy describes the current situation in the German labour market as a “recoil”. In view of the “persistently negative assessment of the business situation, the chances of a noticeable improvement in the labour market during the summer months were dampened once again”.
Richard Detje is a member of the Rosa Luxemburg Foundation’s Executive Board.
Although the German economy has seemed stuck between crisis and stagnation since the pandemic, employment figures had remained stellar until 2024. The common complaint was a “lack of skilled workers”, but this conveniently overlooked the fact that the number of job openings had been declining considerably for two years. Manufacturing companies in particular — the automotive sector, mechanical engineering, and the steel industry — began cutting jobs during this period. As jobs continue to be relocated abroad, IT-based rationalization processes are disrupting the domestic job market, especially in the so-called indirect fields of management, accounting, and administration. Ten thousand industrial jobs are currently being cut every month, 120,000 in the past 12 months.
The End of a Growth Cycle — A Transformation Blockage
The German government is promising to tackle the situation with a 500-billion-euro infrastructure programme. “The aim is to modernize the country, ensure prosperity, and strengthen Germany's competitiveness as a business location through increased growth.” This will have an economic impact, but how strong and how long will it last? The decades-old vocabulary of modernization and competitiveness limits expectations, as tax breaks and investment subsidies have already triggered considerable dead weight loss in previous economic stimulus programmes. And the defence spending financed through the special fund will only have a small impact on employment, as it also requires high levels of capital — the defence industry is not an engine of job creation, even if spectacular factory takeovers suggest otherwise.
There are currently two main dynamics that stand in the way of job creation. The first is a departure from a transformation policy that has allowed public investment to go specifically towards social and ecological restructuring, thereby also steering private corporate investment. Transformation plans focused on the environment have been significantly scaled back both at the European and national levels. The second is a growing realization that the powerful export engines of the past will not be able to cover as much ground in the foreseeable future. Global markets have changed. China no longer absorbs massive quantities of products manufactured in Germany, the MAGA movement is setting the tone in the US, and the BRICS states have their own economic agenda. The German model of export-driven growth has been exhausted.
Keep Going, Even at 67
A German minister of economic affairs should be able to identify plenty of areas where action is needed, but Federal Minister of Economic Affairs and Energy Katherina Reiche is so beholden to a long-failed policy and ideology that she is trying to maintain the opposite of what reports from her own ministry suggest. Her response to the “recoil” in employment policy is counterfactual: “We must work more and for longer”. Her main target is working life: she wants to raise the retirement age to over 67 and end early retirement. The fact that she has not received broad, public support from the German government for this initiative can probably be attributed to party and electoral politics, as the conservative Christian Democrats (CDU/CSU) and, most of all, the Social Democrats (SPD) cannot afford to keep losing segments of their voting base, which is largely made up of voters close to retirement age. In particular, they cannot lose them to the far-right Alternative für Deutschland (AfD).
The CDU/CSU and the SPD are under considerable pressure to implement another labour policy: abolition of the eight-hour workday.
Yet there is hardly any disagreement in the matter. As part of the coalition agreement, the parties have already agreed to encourage work after retirement with a tax exemption for up to 2,000 euro of additional income (active pension). The federal government is not focused on the labour market; its burning issue is pension policy. Klingbeil’s budget plan includes an increase in the federal pension funds subsidy from just under 128 billion euro to nearly 154 billion euro in only three years starting in 2026. To slow this down, a further extension of people’s working lives is being framed as “unavoidable”. The trigger points are being readjusted: working longer is the new TINA formula, which was tested in the summer of 2025 and is likely to be further developed through a communications campaign this autumn. As the SPD coalition partners are aware, this will pave the way for a statutory rise in the retirement age, since a voluntary arrangement will not achieve the desired fiscal savings. Further deterioration of the labour market threatens to be accepted as collateral damage.
Budget planners, always concerned with cost trends when it comes to social matters, are also neglecting another key issue: continuing education for social transformation. Why is there no systematic retraining infrastructure despite the complaints about a shortage of skilled workers? Has the conservative-led government been convinced that training needs must follow business decisions and that proactive skills planning is a bad thing? That would be foolish. Maybe there are other considerations in play here: minimizing collective resistance to layoff programmes and interim employment companies, individualizing (and isolating) those affected, and avoiding creating new areas of institutional action that trade unions might be able to exploit.
Abolishing the Eight-Hour Workday
The CDU/CSU and the SPD are under considerable pressure to implement another labour policy: abolition of the eight-hour workday. The coalition agreement stipulates that the maximum daily working hours should be replaced by week-based regulation. So instead of working eight hours per day, which can be extended to a maximum of ten hours per day through overtime, as stipulated in the Hours of Work Act (Arbeitszeitgesetz), we would work a maximum of Xhours per week. This would inevitably lead to days with 12 or more hours of work, for example on weekends in the food service industry.
Since its introduction during the November Revolution in 1918, the eight-hour workday has been a thorn in the side of business associations. Limiting the number of working hours per day is a barrier to the exploitation of labour as a commodity as well as a requirement for a high-road strategy: shorter but more intense use of labour. Regulating the workday also allows for the formation of social and cultural spheres outside of work, creating potential — both in the workplace and in civil society — for the development of collective and individual abilities and aspirations. Working-hours policy is key to understanding the political economy, a pivot point in redistribution disputes, and a fundamental conflict that runs through the history of capitalism. As such, regulating working hours can also be read as a “measure of freedom”.
But why is the Merz/Klingbeil government placing this at the top of its agenda right now, given the major symbolic significance of reversing such a historic achievement of the international labour movement? They are putting forward three arguments that are far from convincing:
First, the standard justification: “We need to work more again and, above all, more efficiently in this country”, Friedrich Merz has said. What he is suggesting is that the current working hours legislation is putting the screws to companies, when in fact it allows working hours of up to ten hours a day. In addition, the supplementary provision requiring an 11-hour rest period does not apply to the food services industry or hospitals, where 12-hour workdays are possible. This does not seem to be enough for the federal government and the trade associations. Indeed, a simple calculation shows the advantages of a week-based regulation for them: if the eight-hour workday were abolished and only the minimum rest requirement of 11 hours plus a 45-minute pause per day were retained, workdays of up to 12 hours and 15 minutes would become possible. That would be a clear incentive to extend working hours. And in times of more restrictive, cost-cutting personnel policies by companies, this would mean that even larger sections of the workforce would be declared redundant, thus increasing the pace of job cuts.
As the length of the workday increases, the productivity of each extra hour decreases, which is the opposite of ‘efficiency’.
The second argument is an extremely absurd expectation of efficiency. It has been proven that working more than eight hours a day is harmful to health, while working more than ten hours is considered “high risk”. Merz’s efficiency argument — longer working hours lead to higher productivity — is a chimaera. As the length of the workday increases, the productivity of each extra hour decreases, which is the opposite of “efficiency”. And the costs for businesses and society rise with each percentage point increase in sick leave.
The third reason is rooted either in notions of competition or mentality: “In the vast majority of European countries, people work significantly longer hours than in Germany. As a result, our country is continuously losing its competitive edge”. However, this often amounts to comparing apples with oranges. That is the case, for example, when differences in part-time work are not taken into account in comparisons of annual working hours, even though a part-time quota of just under 40 percent ranks Germany among the European countries with the highest rate of part-time employment. Or when people ignore the fact that German companies and businesses recently clocked 124.8 million hours of paid overtime and as much as 149.5 million hours of unpaid overtime. Furthermore, Greek working days, which are six hours longer, cannot be compared to ours without considering the difference in productivity. In other words, longer working days can be extremely inefficient. This also dispenses with the prejudice that places the younger generation of workers under “suspicion of laziness”.
A fourth argument, coming from a welfare-policy perspective, is a view that draws on competition euphoria and cultural pessimism. Chancellor Merz sums it up in his usual incisive style: “We will not be able to maintain the prosperity of this country with a four-day workweek and work-life balance”. However, working more hours cannot ensure thatreproductive tasks will get done (who takes care of children and the elderly?), at least not if there is no willingness to expand social services. This often involves paradoxical calculations: since it is not possible to demand more hours of work from full-time workers who, in some cases, have already accumulated too much overtime, the argument, put forward mostly by the CDU/CSU, amounts to drastically extending working hours for part-time female workers. And this after just expanding the “mothers’ pension”! It could hardly be more contradictory.
A Proactive Strategy
This brings us to the heart of the matter: Why does the German government believe this is the time to go after one of the fundamental pillars of the labour movement’s identity and legitimacy by attacking the eight-hour workday? To answer this question, we must take a critical look at certain developments from recent decades and trade union politics.
The first thing to consider is the extent to which the past decades of neoliberalism have weakened unions, considerably decreasing their ability to resist. By the end of 2024, the overall union membership level was only 13.2 percent. Only 43 percent of West German workers and 31 percent of East German workers were protected by collective bargaining agreements, a fifth or a fourth less than 25 years ago. It is possible that some circles within the federal government may have concluded that the unions of the German Trade Union Confederation (DGB) have not taken advantage of the European Parliament directive to increase collective bargaining coverage to 80 percent in all member states to pursue a more aggressive mobilization campaign.
Only a proactive defence that goes beyond lawsuits in German and European courts can help in this situation.
Secondly, in terms of working-hours policy, unions have been caught off guard. Inflation trends in previous years brought a promising working-hours strategy to a virtual standstill. Securing wages became the priority, and rightly so, but was it necessary to halt working time policy projects, which are known to require several rounds of collective bargaining? As a result, today we are faced with a chancellor who denounces the four-day work week as an attack on prosperity gains — the same four-day workweek that more than four-fifths of full-time workers support in keeping with the legacy of the eight-hour workday.
The fact that the German government is bringing its “social partners” on board to “modernize” the Hours of Work Act makes sense in terms of legitimacy: it secures approval by business associations and isolates the participating trade unions. And the pace is picking up: the “dialogue between social partners” is to be concluded by autumn. Trade unions must prepare themselves to avoid falling into a trap of historical regression, which could turn out to be a double trap if, along with the eight-hour workday, the five-day workweek also became a target of the reactionary modernizers. From the perspective of the Confederation of German Employers’ Associations, it would make sense to ask why finish working on the project on Friday and not on Saturday afternoon.
Only a proactive defence that goes beyond lawsuits in German and European courts can help in this situation. Reaching a consensus on a trade union initiative regarding working hours that brings all individual unions together and coordinates their activities could prove to be a promising strategy four decades after the fight for the 35-hour weekwhile raising the profile of trade-union politics through far-sighted policies against job cuts. Shorter full-time hours for all, a four-day week with wage and staff compensation, and the guarantee of an eight-hour limit for the standard workday would be its building blocks.
Translated by Andrea Garcés and Joseph Keady for Gegensatz Translation Collective.
