German leaders wake up to shrinking population

And just who is going to pay for these new subsidies we have no money now as wage earners and come retirement we won't have any pension either It's not looking like Germany has a rose tinted future tax wise

Source: Reuters

I like the "frosty" bit! So would the last one to leave please turn off the lights.

As long as kids don't have the vote, they'll never be a high priority for a gov't.

There's an idea... lets reduce the voting age by a decade or so - can't see how they could make any more of a mess of it than the German adult population already has & I'd quite like to see a teletubby in parliment :-)

But the father has to stay at home for at least 2 months, to receive this benefit.

What came first? the chicken or the Egg?

You certainly will not have a pension if nothing is done at all. Part of our taxes currently finance the pensions of todays pensioners. If there is no workforce (caused by the current lack of children) to help finance our pensions when you & I reach that age... where will the money come from then?

Germans are not reluctant to start families due to a negative attitude towards kids... its a simple case of "can I afford to raise a child with only one bread-winner in the family?"
This country needs to do a serious overhaul of the current system - and provide parents with affordable childcare facilities.

Its not only Germans in Germany that think like that...

I understand the one year wage replacement will be based on a percentage of your last wage, bad news for low wage earners, those needing affordable childcare more than others. Of course the whole social system here needs an overhaul, but how is it going to be financed? And by who?

Sorry, Only found this info in german. but just to show my quelle for the post above

quelle

The only reason that the government is fretting about population shrinkage is that they can't pay the pensions bill.

In the old days, when old age pensions were introduced it was fairly simple. You had a growing population supporting a relatively low number of pensioners (because they tended to die not long after retiring).

These days, it's become expensive to raise a child according to today's standards (designer clothes, Xbox games, mobile phones etc.) so people are having less children, whilst at the same time, the pensioners of the 21st century aren't dying off a few years after retirement, they're living 20+ years as pensioners, drawing on the state.

Just do the maths yourself. Let's say you're a German, aged 25, just started work, and you have a wife who will be a stay at home mother/housewife. You will work for 40 years, until you are 65 and then retire and live another 20 years, and there are no official pension schemes, you just have to save the cash on your own. In order to maintain your lifestyle when retired (and just looking at today's value of money and no career development etc.) you will have to save 1/3 of your salary for 40 years so that you can spend the same amount of money for the 20 years that you're retired.

Say you take home EUR 50.000p.a netto

For 40 years you live off 50.000 x 2/3 = EUR 33.333 p.a and save EUR 16.666 towards your retirement.
When you retire you then have EUR 666.666 to last 20 years, or EUR 33.333 p.a.

Now tell me how many of us can afford to save 1/3 of our salaries, even if you didn't have to pay Govt. pension contributions?? Not me, that's for sure.

And basically, that's the problem. So what's been the government's strategy... simple, no one wants to have to pay 1/3 of their earnings into a pension, so as long as the population is constantly growing then there'll be enough young people paying into the pension scheme at a lower proportion of their income to support the current batch of pensioners. Each successive government (all over Europe) has had pretty much the same attitude - As long as population keeps growing it'll be OK, and hopefully some other buggers will be in charge by the time it gets to be a problem!

All very well, but the exponential population growth needed to make this strategy work simply isn't sustainable. So giving mothers an extra allowance to have more children is plainly ridiculous.

The real answer is simple:

1. We do need to save more for our retirements, so governments should cut the taxes that we have to pay for these ridiculous child allowances.
2. Old people should be encouraged to take up high risk sports, drink & smoke heavily and sleep with 18 year old hookers as soon as they are diagnosed with a heart problem!

Vote Neil373 at the next General Erection !!

Having read through the article, I see it is based on 70% of wages, with a minimum payout of Euro 300. I really can't see many fathers opting for this with the job insecurity we have now. So not only do we have to finance our own pensions privately, if we are lucky not to be mobbed out of our jobs at the tender age of 40 we can continue to work until we are 67, and also help finance Maternity/Paternity leave and free Kindergartens. Cool!

There are three options:
1. Have more babies.
This is the least politically risky, so politicians love it. Problem is that babies are expensive, and whatever benefits the government gives will never be enough to compensate. It is also not very easy for government to adjust people's behaviour.

2. More immigration
A political bombshell that politicians want to stay well clear of. Most people don't understand that while there may behigh unemployment now, the country will need a lot more people in the long term.

3. Old people have to work longer.
Two problems here. Old people make up an disproportionate number of the vote and have a strong political lobby. This makes raising the retirement age or adjusting the benefit structure almost as difficult as encouraging immigration. Two, companies like to shove the oldies out the door before retirement as it is. Simply raising the official retirement age does nothing. You can't make people work longer but not have jobs for them to work (in the US we make them pack groceries).

In reality all three of these are needed, but none of them will be implimented. I'd say starting saving now and move somewhere cheap and warm (Mexico!) when you retire.

you've missed an option:

4. young people have to start working sooner

get those pre-teens into the coal-mines and the sweatshops!

since the young 'uns don't have the vote then I'd have thought this option would also be politically expedient

You actually raise a very good point. Until recently children were an economic boon to families, not the drain that they are today.

Don't laugh it could become a reality In 2003 FDP Politician Klaus Haupt
suggested giving parents the right to vote for their children from birth :excl:

The Banana Republic is alive and kicking

In many countries children still are considered an economic boon... unless they happen to be female and indian, in which case they often be aborted before birth.

Ever heard of interest? Assuming the given rate of interest your retirement fund will look like this:
3% €1,286,194
4% €1,641,613
5% €2,119,472

Let's take the middle one (4%), let's assume 2% inlation and that's worth €1,020,050 in today's money.
Assuming the same rates of interest and inflation, that's worth €5,160 per month for the next 20years.

My point is you don't need to save that much.

Excellent point that would be soooo harsh on your standard German university student who go to Uni until they are about 43 years old.

Ok, maybe a bit o.t.t. but most university students in Germany don't do an honest days work until they are 30 - Including my brother-in-law who at 28 has so far managed to exploit the Bank of Mam&Dad to cover his rent, get a car, buy his clothes, and supply for his daughter... He is a fully "qualified " solicitor, and has just completed his Doctor's but does not actually have any hands on work-experience of his "profession".

One strange thing I found about this place, is about 70% of my fellow workmates are students and they work as good as full time, including I think a 70 year old guy hobbling around the place at 1 mph on his zimmerframe, being a student here has so many perks, and there are so many students, this must cost someone somewhere a lot of money.

Everyone is entitled to train and retrain, but knowing some of these people it does like they're taking the piss.

Of course I've heard of interest, my example was overly simplified and was just to illustrate a principle.

In real life a person's pension savings increase dramatically over their 40 year working life, but so do their living costs as they become accustomed to a better quality of life.

Government/official inflation rates are always somewhat understated. Did your cost of living only increase 2% last year? I find that hard to believe.

Also, interest rates are not that high, your pension salesman might sell you a pension showing an example giving payback assuming a rate of 5%, but it doesn't really work like that, as most pension companies fail to achieve those targets, hence the problems in the UK in recent years with endowment policies etc.

So, all that said, if your pension fund grows at 1% over inflation and you want to have a pension that will pay out a not unreasonable figure of EUR 5.000 per month (pre-tax) for 20 years of retirement then you will have to save an average of EUR 22.000 per year for 40 years.

Personally I'm going for the "Die early while you've still got enough money to cover the funeral costs" plan

Part of the problem at the moment is that the only people having kids in any numbers are the unemployed - busily producing next generation unemployables. Those earning good money, in particular female academics, aren't having kids because there are effectively no provisions for being a mother and holding down a good job, be it pre-school child care or full-day schools. This goes back to the old German attitude as to what a woman's place in life is - KKK - Kinder, Küche, Kirche (perhaps in some other order). This attitude is still alive and kicking in many parts of southern Germany.

You can't make people work longer but not have jobs for them to work (in the US we make them pack groceries).

Pack groceries?!? Whats that? Never seen it, never heard of it. At least not in Germany. Arent german supermarkets fun!

Packing groceries? Here you are supposed to put the items back in your trolley (without bags), then wheel it to the car and put everything loose in your boot (that's "trunk" for you, rick_de).

I have two somewhat draconian but nevertheless effective suggestions to combat this:

1. If you're unemployed and reproduce then you get your benefits reduced, not increased as is the case today. If the state has to support you in the first place then you shouldn't be irresponsible enough to increase the burden on the state by having children. And before any of the fairer sex beat me up for sexual discrimination, I believe the cutting of benefits should apply equally to the mother and the father.

2. Compulsory I.Q./Aptitude tests - If you don't pass then you get sterilised. I know a short Austrian bloke with a funny moustache advocated this back in the 1930s/40s, it's a bit harsh, but not entirely without merit. Selective breeding of the stupid should of course continue to be allowed under licence, otherwise we'd have nobody to serve the food at McDonalds or sit gormlessly behind the cash desk at petrol stations.

Amazing how primitive it is.

"Trunk" for me? OK, but I understand boot too. Im british!

sorry .. thought you were american.

What gets me is the lack of staff in large shops. Mann Mobilia have opened this huge furniture shop in Eschborn. We went there to have a look around as we will be buying new kitchen, new bathrooms later in the year. Thought we'd grab a coffee. Got to the coffee bar and there was a queue 15 deep and one person behind the bar. We walked out and will never return.

(Off Topic - well only slightly)

Have they? Bollox, I hate that company, I deliver to their Zentrallager in Mannheim and its crap there. It's another company that uses the excuse that the economy is bad and lay people off in the warehouse, then expect the delivery drivers to take over the warehouse storemans job unpaid. But the company bosses still have the money to invest in a new venture

It's no wonder the unemployment is as high as it is

...you got my vote on that.

Thats the thing I notice when I go to german stores after getting back from trips in other countries. There`s always a slow long suffering queue of people, just like in the old eastern block communist days. The stores put all this effort and energy into kundenbefragungen (customer questionnaires), focus groups, tv sets with endless reel promos playing amongst the merchandise, and yet when it comes to the actual customer interface itself, you are given a dose of how shopping used to be in the USSR. Reason of course is that they make their money through converting our time into their profits by keeping us waiting rather than employing sufficient staff. I reckon this trick must be written in all the business studies textbooks in Germany, it is so common.

Theres even one store Peek and (Be)Klopp(t)enburg who really do make you queue 3 times: first to select the goods and hand to the salesman, then you go downstairs, queue at the cashier, and then queue up at the packing desk to receive them! Just like USSR in the communist days.

What do you mean just like USSR in the communist days... bet it is still like that now, only with quick check-outs for mafia dudes

rick_de - this is where you fooled us :doh:

:excl: Rick was quoting from here