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Family – Success Factor for the Economy

Speech by Federal Chancellor Gerhard Schröder at the conference “Family – Success Factor for the Economy”:  

»In the past, family policy often only interested academics and experts within the parliamen­tary groups and political parties. Today, we know – or at least we should know – that a good family policy and our country’s sustainable economic development are inextricably linked. Family policy has long since also been an economic issue. However, I believe that it is much more. Firstly, it is a social issue. Children and families form the social foundation of our society. Particularly in times of so many, sometimes very rapid, changes, people are made aware time and again of the value of their families. Children and families provide support and fulfilment. Children are the answer to the question as to the meaning of our daily grind.

 

If everyone in this hall shares this view – and I am certain that we do – then we also have to ask ourselves a very uncomfortable question. However, we should not only ask the question but also find an answer: why we are so disinterested and unconcerned as to why our country has gone during the last 40 years from one with an abundance of children to a nation with a lack of children? Since 1964, the number of newly-borns in Germany has halved from some 1.4 million to approximately 700,000 today. For a long time we believed that the state, economy and society had nothing to do with this development – or rather, should not have anything to do with it. How many children were born was regarded as a purely private matter. In principle, that is true. The decision for or against having a child is always first and foremost a personal matter. However, the low birth rate over the last 40 years will have a considerable impact on our country’s future and influence the life of each and every one of us. In a country with less children and considerably more older people we must renegotiate and readjust soli­darity among the generations.

 

Ladies and gentlemen, during the last few years we have moved child and family policy to the top of our agenda. I regard it as one of the most important cross-cutting tasks, one which affects every department and every field of policy. Above all, however, and this is demon­strated by this conference, we are much more aware now of the economic dimension of family policy. Children are our future. This is not a mere platitude but is also undoubtedly right in economic terms. They are not only, but undoubtedly also, the workforce, consumers and, above all, parents of tomorrow. Every wish for children which – for whatever reason – is not fulfilled in our country, means that the next generation loses a potential member. Every country needs the experience of older people but they also need the inquisitiveness, the drive for change and dynamism of a young generation.

 

Our future – that is to say Germany’s economic strength, as well as the viability of our pen­sion system and of all regions – depends on our children and on whether and how we enable them to use their talents and abilities for themselves, as well as for society and the commu­nity. Therefore, how many children are born here, not to mention how well we educate each one of them and prepare them for life beyond childhood and after school will be a top priority for our country in the emerging knowledge society. This task is the responsibility of politi­cians, the business community and other groups in society.

 

I am delighted that the business community is beginning to really face up to these changes. I believe – and I say this with great satisfaction, respect and recognition – that this is thanks not least to Renate Schmidt’s brave commitment. In the last few years, she has made many busi­nessmen realize that in-company family policy is – as she has stated – not a wishy-washy women’s issue but, rather, a concrete and long-term strategy to ensure that our country enjoys a bright future. Many companies are increasingly aware that it is even beneficial from a busi­ness point of view to take into account the interests of families; for only mothers and fathers who know that their children are being well-cared for during the day can concentrate fully on their work. Flexible working hours and a family-friendly personnel policy are therefore, in the truest sense of the word, good business because both sides reap benefits.

 

However, the state and social insurance institutions also benefit from family-friendly compa­nies. The larger the number of mothers and fathers able to enter the job market, the higher the volume of taxes and social contributions will be. At the same time, fewer tasks have to be financed through social contributions. But this is about more than bare figures. First and foremost, this is about people. Every single mother who can free herself and her children from social security and unemployment benefit by working, not only serves the social-benefits system. She also fosters her self-esteem as well as the self-confidence and development of her children.

 

Ladies and gentlemen, the heightened interest in the “Erfolgsfaktor Familie” (Success Factor Family) competition shows that family-friendly policies have long since become a serious economic issue. The number of entries to the competition have risen fivefold compared to 2000. We have made a conscious decision to award the prizes in the Federal Chancellery on 24 May in order to underscore that this issue is important to us all. However, we should also remember that taking the interests of families into consideration has, unfortunately, not yet been incorporated into the business philosophy or strategy of many companies. Although flexible working hours and part-time work, particularly for women, are standard nearly everywhere, child-care support is still too scarce. Incidentally, I am not saying this to detract attention from the state’s obligation to provide child care at all levels. But I am firmly con­vinced that you as employers can and must play a key role in bringing about the expansion of child care which we need so badly.

 

The “Lokale Bündnisse für Familien” (Local Alliances for Families) provide an excellent platform for this. They enable local councils, together with trade unions, churches, charities and other partners to advance education and child care. There are already more than 140 of these local alliances and I regard this as a great success. This voluntary-commitment approach is also reflected in the “Allianz für die Familie” (Alliance for the Family). I would like to expressly thank you, Dr Hundt, for lending active support to this initiative. It is helping to make Germany a child and family-friendly country.

 

Ladies and gentlemen, the Federal Government has initiated a sea change in child and family policy. In the years following 1998, we increased financial support for families on a scale unprecedented in the Federal Republic’s history. We raised child benefit by 40 euro to 154 euro per child. By way of tax cuts and higher tax allowances, we have ensured that the per-annum disposable income of an average earner with two children is some 2,000 euro higher now. In terms of purely financial support for families, we are now at the top of the European table. That is certainly good but no reason to be complacent. For this has had no effect – not so far at least – on our birth rate. It is considerably lower in Germany than, for example, in the Scandinavian countries or even in France.

 

We therefore have to ask ourselves: why is it that umpteen thousands of young men and women in Germany each year at least postpone starting a family? We know that many fear the loss of income of one parent after the birth. And especially women in Western Germany are worried – unfortunately with some justification – that it will be difficult or even impossible for them to start work again due to the lack of child-care places. However, we cannot allow a situation to arise where a young woman decides against starting a family simply because she is faced with the choice “child or career”. Nor must we allow a situation to arise where a family with a normal income has to say: we cannot afford a child. That means that the family policy of the future must create the basic conditions under which more people can fulfil their wish to start a family.

 

I am firmly convinced that parents need more infrastructure rather than more money. That is why the Federal Government has taken action. Not least in response to the PISA study, we have launched a programme to the tune of 4 billion euro to fund the construction of all-day schools over the next four years. The Hartz IV reforms – which are sometimes unfairly criti­cized – have lessened the burden on local councils by at least 2.5 billion euro per annum on a long-term basis. We expect 1.5 billion euro of this to be invested in the construction of day-care centres for the under threes. Incidentally, we are not interfering in anyone else’s area of responsibility here and I therefore cannot understand the complaints of some Minister-Presi­dents. Everyone knows that most all-day schools now being established would not have been possible without a Federal Government subsidy. One cannot complain on the one hand about having too little money for schools and, on the other, turn down an offer of assistance just because it comes from the Federal Government.

 

Ladies and gentlemen, we must improve child care. I cannot say whether all feasible and suitable proposals have already been evaluated. I do not believe so. In any case, nobody stops us from looking beyond Germany’s borders. The question as to how others have halted the disastrous downward trend in the birth rate is necessary, not out of bounds. Sweden’s and Denmark’s experience with the introduction of parental benefit as real wage replacement benefits during the child’s first year has been positive. More women in employment are deciding to have a child and more fathers are taking advantage of the opportunity to play an active role in bringing up their children. I therefore welcome the debate kicked off by Federal Minister Renate Schmidt even though I believe that there is still much to be discussed. We must certainly continue our efforts to make it easier to combine family and career. For there has never been such a well-educated and highly qualified generation of women. It is a terrible personal injustice if well-educated women are forced to stay at home simply because there are not enough child-care places. However, it is also a waste of our economy’s resources. For these women are the qualified workforce of the future for companies which are already con­cerned about the scarcity of highly skilled employees, or will be in a few years’ time.

 

Ladies and gentlemen, every child has a right to the best possible support and the best pos­sible education and vocational training, regardless of their social background. Even today – unfortunately this, too, was highlighted by the PISA study – social background often deter­mines a child’s future. I want to stress here that all children need a fair chance of gaining good qualifications, regardless of whether they come from a professor’s or a worker’s family. Not least the economy would benefit from this. Therefore, especially children from families in which there is little communication and no books – and they exist – need support in their early years. Particularly these children need contact with other children in order to acquire social skills. They need help in order to develop their talents. Above all, they need language tuition. For children who have not mastered the German language by the time they start school are, in reality, already condemned later on in life to casual jobs at best.

 

Some will say at this point that the state should not be involved in bringing up children. My response to that is: we certainly do not want to nationalize the raising of children. However, we must realize that unfortunately there are families today in which children have no hope of development and encouragement without the help of the state. These parents need support in a way which does not absolve them from bringing up their children. In some cases, this means that in addition to warm meals their children receive the attention and stimulation in all-day kindergartens or schools which, sadly, is lacking at home. Investment in the education and bringing up of children is therefore an excellent investment in the future.

 

Ladies and gentlemen, I also believe it is important that all pupils are taught about values and ethical issues at school. I strongly agree with Bishop Huber, the Chairman of the EKD Coun­cil, even if some disagree: children and young people should have the choice at school of either learning about their own denomination or of learning about values and religions from a neutral standpoint. This issue lies within the area of responsibility of the Länder which should make a decision in close cooperation with religious and similar communities. We can do easily without go-it-alone decisions on this issue.

 

Ladies and gentlemen, we want to turn Germany into a family-friendly country by the end of the decade. Let me emphasize that this goal belongs to Agenda 2010. In my policy statement of 17 March, I made it clear that Agenda 2010 will be continued with vigour. We will further lessen the burden on companies, thus strengthening the competitiveness of the German economy. For that is our goal. We have nothing to give away and we do not want to give anything away. But if we look around we realize that these measures must be implemented because we will otherwise become less competitive. I believe we will manage to put into practice what has been agreed and that it will not be misused as a political football in partisan politics. This is the task we face. I, at least, will do everything in my power to ensure our success. We will lessen the burden on companies further and thus strengthen competitiveness. For they must be able to hold their own in the global competition.

 

However, we will also show that Agenda 2010 is not merely a project which will pay off for industry. We want Agenda 2010 to amply reward the families of this country. We will only succeed in this if all sections of society join forces. Every skilled worker, small businessman or executive can and must play his part to ensure that we become a country in which children and families are welcome. For I would like to emphasize once more that investing in children and families means investing in our common future, especially in the future of generations to come.«

 

Speech by Federal Chancellor Gerhard Schröder at the conference “Family – Success Factor for the Economy”, Berlin, 13 April 2005; Translation

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