While the British government is about to introduce legislation which, as a consequence of efforts to limit child abuse, makes it formally illegal for teenagers under the age of 16 (the age of consent in the UK) to engage in any mutually agreed sexual activity, including kissing or even hand holding, it could appear as if the German government were moving in the opposite direction. But that’s a complicated story. One that suggests the German government has decided to add a little fun to the otherwise joyless job market by mocking itself.
Run by the government?Everyone who is familiar with the record of the current German government will probably remember that their initial reformist zeal quickly turned into a series of legislative and then economic disasters in the course of their first two years in office. In a truth-or-dare speech, Chancellor Schroeder even admitted this to the Bundestag a couple of weeks ago.
An important part of the problem in 1998 was that in order to be able to govern, the relatively weak Chancellor had to cut the SPD’s loony left’s influence within his Parliamentary party – epitomized by then SPD chairman and finance minister Oscar Lafontaine. So after beating the left with the stick by forcing Lafontaine to resign and assuming the SPD leadership himself, Mr Schroeder had to feed them some carrots, too. That is why the labour market became even more rigid in the first two years of the SPD government. A legacy still haunting the government. Yet history seems to be about to repeat itself.
Following his resignation from the SPD’s chairmanship in early February, it became quickly clear that the price for the left’s relative silence in the face of even mild deregulation would be a tax on businesses failing to employ a certain number of vocational trainees – a measure intended to reduce youth unemployment. However, by further increasing the cost of labour, such legislation would in all likelihood have an adverse effect not just on youth unemployment, while it would certainly increase the transaction costs of the German economy, not least by setting up a new federal agency of at least 600 employees, as some commentators claimed.
And as if this weren’t “funny” enough by itself, other ghosts of the past are now mocking the well-meaning interventionists, too: About three years ago, the coalition introduced legislation that made prostitution basically a job like all others.
Before, it was legal to engage in prostitution and buy sexual services, but it was illegal to promote prostitution. The latter was prohibited to ensure the punishability of exploitative pimps yet had the adverse effect that it was also illegal to provide prostitutes with services other than “protection”, say catering, if the catering service was also owned by the person or entity letting the rooms. The new legislation made the provision of sexual services a job like all others, allowing brothel owners to cater, but also to employ working girls.
However, beyond legalising activities like catering, the law, intended to allow sex workers to enter the public safety net as normal employees does not appear to have been particularly successful. While Ver.di, the giant service sector union, set up a working group to deal with the particular difficulties caused by employment contracts consisting of the employee’s obligation to perform a specified set of sexual services to a usually unknown client, it seems most prostitutes shook their heads in disbelief and continued to work as freelancers – a status that allows them to reject clients at will and, moreover, has significant (implicit) fiscal advantages in a largely cash-based business.
Strangely though, as Spiegel Online reports today (link in German), those brothels which are actually doing what the legislator intended and are actually employing prostitutes will now become subject to the proposed new “apprentice-or-tax” legislation, for it only concerns businesses with employees in the public social security system. And an exemption would be too difficult to manage, as the Ministry of Education – which is in charge of the operation – explains.
Does that mean that the German government is so desperate with respect to the structural lack of jobs in the German personal service market that it has decided to enter the pimping business and ask brothel operators to hire prostitute-apprentices? Not quite. Well, not yet, at least.
The process of establishing the regulation for a formal apprenticeship in Germany is one of the last remnants of corporatist, sort-of-guild-based decision making, and a science in itself. In an ever faster changing economy, it’s not uncommon that definitions are ready when the jobs have already disappeared. That, for sure, would not be a dominant concern with respect to the design of a vocational training scheme for the oldest business in the world.
But at the moment there is no formal apprenticeship for sexual services. Accordingly, for the time being the Ministry’s argument is correct that only the hiring of apprentices for officially recognized vocational training schemes, say waiters, or accountants, would allow to save the tax. That, and, of course, not formally employing prostitutes in the first place, as outlined above and as feared by the Greens. But I suppose the red light district will now try to hoist the government by its own petard and seek the official recognition of a vocational training for prostitutes – if only for adult apprentices.
I don’t think any Chancellor would like to be called “Ueberpimp” in the tabloids for promoting prostitution… But wouldn’t it be hilarious to read the employment agency’s apprenticeship- recommendations? Outgoing person? Like to work with people? Try this…
I wonder what Friedrich Hayek would have told these people.