German employers are advocating for a reduction in social contributions to under 40 percent. As social contribution rates continue to rise, businesses are urging the incoming government to address what they term as "net theft," where employees see diminishing returns on their hard-earned salaries.
Steffen Kampeter, Chief Executive of the Confederation of German Employers' Associations, highlighted the inefficiency and expense of the current healthcare system, calling for deep reforms and increased competition.
A study by the Berlin-based Iges Institute forecasts that social contribution rates, encompassing health, care, unemployment, and pension insurance, could escalate to 49.7 percent by 2035. Employers are particularly concerned about the impact of these rising costs on the attractiveness of work, with some warning that if unchecked, this trend could make employment less desirable.
The handcraft sector is also feeling the pressure, with social contributions reaching 42 percent and labor costs comprising up to 80 percent of total expenditures. This has led to the loss of approximately 80,000 jobs in the sector, prompting calls for a social contribution cap and a shift towards a policy that favors small and medium-sized enterprises. The looming demographic changes further exacerbate the issue, as the burden of financing social systems becomes increasingly heavy.
Stakeholders are urging policymakers to implement a social contribution cap and to reassess the financing of social systems to prevent further strain on businesses and employees alike. The aim is to ensure that the socio-economic landscape remains sustainable and equitable for all parties involved.
