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Since the late 1970s, massive and longlasting unemployment is the primary problem for social-economic policy in European welfare states, and to a lesser extent, also in the US. Especially long spells of unemployment and the so-called ‘modern poverty’ are not only corrosive for the persons concerned but also for society at large. Governments try to attenuate the consequences of unemployment and poverty by providing social benefits conditionally, and, in so far as in its power, to take employment-promoting measures. However, recent social-economic policy measures designed to reduce unemployment can largely be characterized as ‘piecemeal social engineering’. They vary from reducing the level of minimum wages, reducing the tax wedge, the introduction of work- and learnfare programmes for the unemployed, relaxation of firing and dismissal procedures, the implementation of work subsidies for low …