Why Is Reducing Unemployment Unpopular?
by Adam S. Posen, Peterson Institute for International Economics Op-ed in Welt am Sonntag March 16, 2008 English version © Peterson Institute Another anniversary has rolled around for the previous Red-Green government’s package of labor reforms and with it another long-unseen low in Germany’s number of unemployed. Precisely one year ago, I explained in this space why “Hartz IV Worked—As Far As It Went,” and recent developments in the German economy have continued to demonstrate the validity of that assessment. Changed labor supply incentives have meant that more unemployed people took real jobs when the current upswing provided them with the opportunity than did during previous German recoveries. Nevertheless, the Hartz IV and prior labor reforms are being partly blamed for the recent rise of Die Linke’s (the Left’s) electoral fortunes in Hamburg and Hesse and the more general backlash against further liberalization in Germany today. Why is such a successful set of economic policies so
