Impulses for Growth and Employment through Profitable Savings in ...

Table 1 shows that the effects on GDP are
only slightly different to those in Scenario
I. However, this scenario has a much better
labour market effect of about 760,000
additional jobs because the negative effect
on employment due to wage increases is
inapplicable.
Further results of Scenario II in 2015 in
comparison to the base-line scenario are:
• Economy: Real production value grows
by 2.4% or EUR 110.0 billion, net
company profits grow nominally by
EUR 163.6 billion.
• Employees: The wage bill grows nominally
by merely EUR 22.3 billion. However,
prices fall more than in Scenario I
with the effect of a real improvement of
the position of employees:
With practically unchanged nominal
wages real wages increase through a
3% decline in consumer prices while
employment increases by about
756,000 persons.
• Public sector budgets: Relief at a
nominal EUR 21.2 billion is now considerably
higher than in Scenario I because
social costs are now much lower
due to the employment situation.
Of course, employment effects do not take
place to the same degree across all sectors,
as figure 2 shows. Definite winners
can be found in all service sectors. Besides
trade and services close to companies,
the health sector, education, culture,
sports and entertainment as well home
services benefit particularly. These sectors
profit from an increased demand emanat-
ing from higher incomes induced by dematerialization.
Results of Scenario III
In Scenario III productivity growth minus
the counteracting wage development is
passed on fully to consumers in form of
price reductions. With respect to wage
formulation we assume the same behaviour
as in Scenario I. This means that the
wage rate is endogenous.
The benefit for business, employees and
the government is initially in a clear improvement
of purchasing power vis-à-vis
Scenario I and II because of a price reduction
of 7.2%. The expansive effect on GDP
is the strongest of all scenarios. In comparison
to the base-line scenario the following
effects are anticipated for 2015:
• Economy: Production value increases
in real terms by 6.4% or EUR 195.5 billion,
net company profit increases
nominally by EUR 115.0 billion.
• Employee wages: The wage bill increases
by a nominal EUR 38.6 billion,
purchasing power per working hour increases
by 11.2% concomitant with a
7.2% decrease in consumer goods
prices and a 4.0% increase in nominal
wage rates. However, employment
drops by about 300,000 persons due
to the strong growth in real wages.
Employment losses are much lower
than in Scenario I because of the
stronger general economic upturn.
• Public sector budgets: In comparison
to Scenario II the state budget is burdened
by higher social costs so that
the effect on the financial balance of
the state at EUR -5.7% billion is
slightly negative.
This means that stronger price competition
in the national market also increases the
benefits of a profitable dematerialization
and other productivity gains for businesses,
the state and employees as well
as providing a limited number of new jobs.
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