The coalition has decided to support Hartz IV recipients even if they don’t try to find a new job. The regulation from Corona times applies for another year. The signal is fatal at a time when workers are desperately needed. Another way is much more promising.
The decision that the Bundestag made with the votes of the traffic light coalition last week was overshadowed by the war, oil embargo and inflation – but in reality it is a change of perspective in German politics: Long-term unemployed people also receive their basic security if they do not seek regular employment.
The regulation is initially limited in time and those who don’t try at all can still be fined a bit, but the principle of demanding and promoting has largely been abolished with the decision – and the unconditional basic income for the almost 3.6 million Introduced through the back door to the long-term unemployed.
First, the social market economy is undermined. The core of every market economy is that prices indicate and overcome shortages. In principle, this also applies to workers: If they do not earn enough wages for their work, they should change their work profile so that it is in demand.
Because that can be brutal and doesn’t always succeed quickly, there is unemployment insurance and also money from the state for people who cannot find work for a long time. This is the “social” in the system of the social market economy. However, if no obligation is imposed on this group to reintegrate into the labor market, they are permanently outside the market economy system.
Secondly, the decision, even if it is initially only valid for a limited period, comes at the absolutely wrong time. It is implemented in a situation in which companies are desperately looking for employees. 1.74 million jobs in Germany are open to job seekers. The most urgent problem at the moment is not unemployment, but the shortage of labour.
Sending out the signal in this situation that it is not so important to look for work is fatal. The German economy is caught between inflation, war, energy shortages, climate requirements and delivery bottlenecks. Then there is the baby boomer generation that is retiring. Now, too, by such a decision to treat work as an expendable good is a decision that points in the wrong direction altogether.
And thirdly, the rhyme that those affected can make with the decision: Those up there have given up on us. It is annoying for them to have to look after us again and again. You pay – and want peace and quiet. 3.6 million long-term unemployed can now be satisfied with their Hartz IV support of 449 euros per month plus housing benefit. Questions are not welcome. This is also a signal that comes from the decision of the federal government.
Understandably, those who now have to implement the decision do not think much of it: The Federal Employment Agency writes in its statement: The job centers need “a handle if individual beneficiaries completely refuse the joint efforts to reduce the need for help, for example, by not accepting reasonable job offers.”
The employment agency was ignored because the coalition pushed an argument and an idea. The argument: Despite the demands, the funding thing never really worked. There are currently around one million long-term unemployed in Germany who have not had a job for more than two years, many of whom have been unemployed for four or more years. Apparently no request to do anything helped here. Controlling them less closely means that everyone is relieved.
And the idea behind the decision is that of an unconditional basic income. In addition to the protection of human dignity, this is also based on the view that digitization is causing more and more jobs to be lost while productivity is increasing. This allows people to be granted a basic income that is not linked to any performance. So far, however, there is no evidence for the thesis of permanent job losses. On the contrary: More workers are needed – just like after all the technological advances that have emerged in the past centuries.
Instead of just approaching the unconditional basic income with all its devastating effects, the coalition still has another way of making Hartz IV – or as it will soon be called: citizen income – more effective. The system has a massive design flaw: Those who receive Hartz IV have no incentive to earn anything extra, because up to 100 percent of the additional income is covered by state taxes. There is nothing left – unless the Hartz IV recipient renounces the state aid, for which a small additional income is not sufficient.
On the other hand, such an extra income could be the first step back into employment that is subject to social security contributions. If the traffic light coalition does not want to turn the system upside down, but want to make it work, it must start at this point.
The article “Hartz IV without sanctions: The traffic light makes 3 crucial mistakes with its citizens’ allowance” comes from WirtschaftsKurier.
