The future of the welfare state Budapest, September 16th, 2009 The future of the welfare state Prof. Dr. Wolfgang Schroeder Budapest, September 16th Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 1

Structure: The welfare state The challenges of the welfare state Budapest, September 16th, 2009 Structure: The welfare state The challenges of the welfare state II. The crisis and its impacts on the welfare state IV. Rebuilding the welfare state Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 2

I. The welfare state 3 Budapest, September 16th, 2009 Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 3

I. The welfare state Typology (Esping-Andersen) conservative Budapest, September 16th, 2009 I. The welfare state Typology (Esping-Andersen) conservative contribution-financed, acquisition-centered social democratic high tax volume, based on infrastructure liberal taxfinanced public basic pension, supplemented by private coverage Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 4

Budapest, September 16th, 2009 I. The welfare state Social expenditure (percentage of GDP) in Germany 1960-2007 (source: Sozialbudget 2007, BMAS 2008) Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 5

I. The change of the welfare state Budapest, September 16th, 2009 I. The change of the welfare state EU-27 average Social expenditure (percentage of GDP) in the EU-27 (2006) (source: Eurostat) wird ersetzt/ergänzt durch Langzeitvergleich Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 6

II. The challenges of the welfare state Budapest, September 16th, 2009 II. The challenges of the welfare state Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 7

I. The change of the welfare state Budapest, September 16th, 2009 I. The change of the welfare state Change of the age pyramid 1910-2050 (est.) In Germany Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 8

II. The challenge of the welfare state Budapest, September 16th, 2009 II. The challenge of the welfare state percentage of population elder than 65 years 1998-2008 (Source: Eurostat) Germany Hungary EU-27 1998 15,8 % 14,7 % 15,3 % 2003 17,5 % 15,4 % 16,2 % 2008 20,1 % 17,0 % Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 9

II. The challenge of the welfare state Budapest, September 16th, 2009 II. The challenge of the welfare state Unemployment rates in Germany & Hungary 1999-2007 (source: destatis.de) Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 10

II. The challenges of the welfare state Budapest, September 16th, 2009 II. The challenges of the welfare state Structural change in the employment market in Germany 1992-2007: rapid growth of the third sector (yellow line) (source: Statistisches Jahrbuch 2008) Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 11

II. The challenges of the welfare state Budapest, September 16th, 2009 II. The challenges of the welfare state Numbers of employees subject to social insurance contribution decline… …and low wage employment rates rise Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 12

II. The impact of increasing low wage sectors Budapest, September 16th, 2009 II. The impact of increasing low wage sectors Rapid growth of low wage jobs, slow growth of minimum wage jobs Women and younger people are above average in low wage jobs Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 18

II. The challenges of the welfare state Budapest, September 16th, 2009 II. The challenges of the welfare state Growth of female employment rates and decline of male employment rates over the last 40 years Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 13

II. The challenges of the welfare state Budapest, September 16th, 2009 II. The challenges of the welfare state Rise of poverty in Germany 1998-2007 (source: Hans-Böckler-Stiftung) Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 14

II. The crisis and its impacts on the welfare state Budapest, September 16th, 2009 II. The crisis and its impacts on the welfare state Political crisis Neoliberal direction: competitive ability – weaken of the state und strnegthen of self responsibility Weaken of trade unions Bureaucracy-control-criticism: More quality, less paternalism Destabilization of the coordinated market economy Rhenish capitalism vs. anglo-saxon capitalism Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 17

III. The crisis and its impacts on the welfare state Budapest, September 16th, 2009 III. The crisis and its impacts on the welfare state Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 15

III. The crisis and its impacts on the welfare state Budapest, September 16th, 2009 III. The crisis and its impacts on the welfare state Decline of economic growth Temporary keynesianism Financial problems of the state cut-back programs concerning social expenditure education subventions pensions … Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 16

IV. Rebuilding the welfare state Budapest, September 16th, 2009 IV. Rebuilding the welfare state Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 19

IV. Rebuilding the welfare state Budapest, September 16th, 2009 IV. Rebuilding the welfare state Hybrid structure of German Welfare State Financing of social welfare in % 2006 (source: bmas.de) Interpretation? Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 20

IV. Rebuilding the welfare state Budapest, September 16th, 2009 IV. Rebuilding the welfare state Reforming the German Welfare State from 1989 on, accelerated under social democratic government 2001-2003 New definition of German social policy Transformation of the social insurance state: New (early) education policy, family policy, integration of migrants and even inclusion policy as important parts of social policy New pluralism and new relationship by the main actors of welfare policy: State, social insurance, welfare groups, private companys, households self responsibility is getting more important: but it needs a strong social state Interpretation? Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 21

IV. Rebuilding the welfare state Budapest, September 16th, 2009 IV. Rebuilding the welfare state Reforming the German Welfare State from 1989 on, accelerated under social democratic government 2001-2003 New main focus of social policy Changing focus to more infrastructure (Kindergarden, schools etc.) and activating policy New mixture of social support Less increase in monetary transfer to more increase by institutional support Interpretation? Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 22

IV. Rebuilding the welfare state Budapest, September 16th, 2009 IV. Rebuilding the welfare state Obstacles: implementing social reforms Party competition: Social democratic party is the first victim of cut back benefits and new activation policy: Building up a another left party Generational and Demographic problems: fewer young working people have to support more and more old people Status orientation: people are oriented to their occupations;if this is not longer the reference for the unemployment policy Interpretation? Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 23

IV. Rebuilding the welfare state: conclusion Budapest, September 16th, 2009 IV. Rebuilding the welfare state: conclusion labor market state family individuals I. Golden Age full employment for men normal contracts redistribution to reach equality decommodification passive men at work, women at home Promot oriented II. Third Way new full employment for men and women increase of precare work less redistribution recommodification feminisation of labor market household as a workplace Promot and demand III. post- Third Way regulation of precare work redistribution again focus on infrastructure Stronger help for families Promote and demand Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 24

Thank you for your attention! Budapest, September 16th, 2009 Thank you for your attention! Prof. Dr. Wolfgang Schroeder Fachbereich 05 Politisches System der BRD 25