Hartz reforms and immigration
The central fact of the german economy for decades has been the low fertility rate and the shrinking of the working population, in particular of the male working population, as men live shorter lives than women, and this has unbalanced the ratio between working men and retired women.
Wikipedia reports that even if young german men outnumber young german women in a 105 to 100 proportion (something that gives much greater power to german women in the marriage market), there are only 75 men per 100 german women over 65 (something that gives greater power to german women as to voting, as the percentage of the population over 65 increases).
The more obvious fact of the german economy has been the Hartz "reforms", which have involved a substantial cut in welfare benefits for the unemployed, and a strong encouragement of low paid casual work as a replacement for unemployment benefit, in order to create higher competition for existing jobs and keep down wage growth.
One commont claim is that the Hartz reforms were designed to cut unemployment statistics if not unemployment (low paid casual work is not quite employment but it is classified as such), but the their timing and subsequent developmnts suggest a rather different explanation:
The shrinking german population would create upward pressure on wages, and a shift in national income from business and land owners to workers, and a tendency for the valuation of businesses and land to fall due to shrinking number of customers and buyers/tenants.
At the time the Hartz reforms were designed negotiations were well under way to let the low-wage countries of eastern Europe join the European Union, and a flood of immigrants was expected from them into Germany and other rich EU countries, to the point that full freedom of movement was delayed.
Most german voters would continue to have well paid secure jobs and live in their good quality low rent flats and houses with long term secure leases.
The german political and business class wanted to ensure that the immigrants would have a much less favourable treatment than german citizens, and would be channeled into casual low wage and would have to compete hard for housing at higher rents and with less security than incumbent german voters.
As to this the Hartz "reforms" have been highly successful: there are in effect two tiers in the german economy:
One reserved mostly to incumbent german older middle class voters with better jobs, wages, job security, lower rents and greater security of housing tenure.
An inferior tier of casual low paid jobs and insecure low quality housing for immigrants from a massive inflow from eastern Europe in the 2005-2015 period, and then with a massive inflow of middle eastern refugees in the 2015-2020 period.
Both inflows added to the first increase in decades to the total german population, which had been declining until 2011, and around 25% of residents of Germany are now of foreign origin, many of them young male workers.
While most native incumbent middle class workers in the first tier have maintained their vested advantages, and have enjoyed cheaper services thanks to wider availability of cheaper immigrants in casual jobs, and lower tax growth thanks to welfare cuts, there have also been some disadvantage:
The much expanded labour supply has flatlined wage growth for most german workers, which would have instead improved if population had continued to fall.
The minority of incumbents in the first tier who lose their stable jobs and secure housing end up having to compete with the immigrant workers for low paid jobs and insecure housing in the second tier economy.
So far most german voters have remained in the first tier economy, so the main political effect of the Hartz reform has been a collapse in the votes for the SocialDemocratic Party that introduced them, as many of their previous voters were in the lower rungs of the first tier econmy and have fallen or risk falling into the second tier economy. Most Christian Democract voters are solidly middle and upper class, and their risk of falling into the second tier created by the Hartz reforms is small, so there has not been as big a fall in the votes for the Christian Democrats, but overall there has been a shift to an anti-immigrant party.
In all this the Hartz reforms have not been in nature too different from the "neoliberal revolution" of the Thatcher and Blair and successor governments, but in the intensity; in particular so far even the Christian Democrats have refrained from the english strategy (etc.) strategy of pumping up residential property and share prices to buy the loyalty of the affluent middle classes despite the worsening of salaries and job security.
That may not be going to last: given that most german voters have long term secure low-cost housing leases, the latest immigrants inflows have started to impact severely the availability and price of the small proportion of housing stock that is available on the market, and once there is momentum for higher residential property valuations most middle class voters take notice and start putting their savings into it expecting ever bigger capital gains (as in China currently or in Japan before 1992), and the political demand for high housing cost inflation becomes hard to resist, which eventually leads to big problems in the real economy.