It is High Time that Instead of Waiting Further Business Should Jump In

The situation is just ripe for business to jump in instead of waiting further. When the economy in Germany tanked following the financial crisis of 2008 the pain was resolved by a plan named Kurzarbeit – meaning short work.

Instead of discharging workers, the German firms reduced their hours of work. The government then made use of the funds that had been kept aside when the sun was shining to pay these workers about 60% of the wages they now lost. The labour unions agreed to this because they thought it was wiser to keep the workers employed albeit with reduced pay. This is known as the social compact of Germany.

Currently USA is experiencing hard economic times. The German approach is enviable. Here in America the workers are laid off fast and many never manage to get back their full time working status. The firms hesitate to invest for tomorrow although it is investment alone that will make the economy turn around. The government keeps talking about creating of jobs but does not take any action to back up the chatter.

In this downturn according to the latest figures nearly 25 million persons calculating to over 16% of the work force are seeking full time employment. The firms are hoarding loads of cash while reporting mega profits.

The government has its own idea of job creating. Obama is offering unemployment insurance while painting fancy pictures of distant “green jobs”. He seems to have run out of ideas.

Meanwhile the opposite camp – the Republicans are insisting, despite increasing evidence contradicting it that increases in tax cuts would lead to generation of jobs. Most of the citizens have given up hope on the ability of the present government to come up with a viable programme for employment.

Basically the government seems to be paralyzed and the only hope is for the businesses to become job creators instead of job seekers. With the piles of cash the firms should not be hanging around for Congress to gift them with tax incentives. It is up to business circles to ward off another bout of recession and to give a kicking start to the economy. Investments and hiring of workers is the sure road to prosperity.

Thus American society has to go about making implicit what Germany has made explicit. The companies will have to give up chasing short-term gains for a long-term harvest.