Union and the traffic light coalition have agreed on a compromise on citizen income. In order to be able to assess what it is good for, a look abroad helps. Some of the experiences are terrible.
The way is clear, now it just has to lead somewhere: after days of wrangling, the traffic light coalition and the Union have cleared the way for the citizens’ allowance planned from January. In principle, both sides came together on the two main points of contention, details must be finally clarified in the mediation committee from Wednesday evening. If this succeeds by the end of November, which most observers assume, the citizen’s income can replace Hartz IV as planned from January 1, 2023.
The so-called waiting period with milder regulations, originally set for 24 months, should only be 12 months. The Union side also implemented a reduction from 60,000 euros to 40,000 euros in the case of protective assets. Among other things, there should be sanctions in the form of withdrawal of benefits from day one in the future – these were originally only planned after six months.
The so-called trust period of six months should therefore be completely eliminated. Anyone who violates certain obligations, such as not keeping an appointment with the employment agency, must expect financial losses. It is still unclear how painful they are.
As technical and detailed as the regulation looks at first glance, it was ultimately about very fundamental questions that have not yet been finally clarified: What is fair? What can you ask of the unemployed? What image of man characterizes the political actors and how does the SPD deal with its past, i.e. Agenda 2010?
Federal Minister of Labor Hubertus Heil (SPD) is the father of citizen income and had to see how his project was stopped in the Bundesrat by several federal states – especially those in which the CDU and CSU are co-governing.
Among other things, the Union was against the relaxation of sanctions against the unemployed: the citizen benefit reform stipulates that those who do not cooperate with their advisor in the job center can hardly have their benefits cut. The principle of “support and challenge”, which has not only existed since Agenda 2010 but is already in the Bible, no longer applies.
If you want to assess what is coming, you should look abroad: The OECD offers a good comparison of how much money is spent on social spending in Germany: In 2019, Germany spent 25.9 percent of the gross domestic product on social affairs . Italy (28.2 percent), Belgium (28.9 percent) and France (31 percent) are above, Great Britain with 20.6 percent well below.
If you analyze the system there and in France, you will get indications of what could go well and badly with regard to citizen income in Germany.
Under Prime Minister David Cameron, the British government began a massive overhaul of the social system in 2013. Six state benefits, above all unemployment benefit, were combined in the so-called Universal Credit. The social system should become fairer, less complicated and more efficient.
The stance behind the project was that it wanted to make it harder for recipients of government benefits to feel comfortable in the social hammock. The incentives should be high to look for a job again. At that time there was approval from several parties in London.
However, it didn’t take long for problems to mount. Actually, from 2013 to 2017, most beneficiaries should be transferred to the universal credit system, but in addition to management errors, there were technical problems. It cost billions of pounds – and a lot of time. The target date for the transition is now 2024.
And the consequences for many beneficiaries were significant, many of them got into financial difficulties through no fault of their own. The Resolution Foundation think tank has calculated that 2.5 million working households in need of assistance will now have more than £1,000 less a year to spend as a result of the changeover.
According to the OECD, France spent a whopping 31 percent of gross domestic product on social affairs in 2019 – over five percentage points more than Germany. So it is not surprising that France is also currently working on a reform of basic security. Except that the previously applicable regulations are to be tightened here. So far, the so-called “Revenue de Solidarité Active” (RSA) has been received by anyone who is at least 18 years old and has either not acquired any entitlement to unemployment benefit or has received unemployment benefit for a maximum period.
In future, those who receive the RSA should work between 15 and 20 hours a week in return or carry out further training for the same number of hours. The aim is to motivate and enable recipients to return to work on a permanent basis. So far, this has only worked to a limited extent in France.
The French long-term unemployed are currently getting more than the German Hartz IV recipients, which is a cause for criticism, especially for the conservatives and right-wingers in France. “Depending on the household situation, it is better to live with social assistance than if you have a job,” argues the conservative Paris think tank iFRAP.
There are also major parallels between the German citizens’ income and France’s current situation in the following respect: There are hardly any sanction options and the unemployed can be very lucky or unlucky who they get to at the authorities – the support is sometimes very different.
Back to Germany and how the feeling of justice is in this country: The German Institute for Economic Research (DIW) and the Ruhr University Bochum have asked 560 long-term unemployed in eight job centers what they think is right and fair. 41 percent agreed “completely” with the thesis that “there are many Hartz IV recipients who take advantage of the system”. A further 24 percent “rather agree”, only ten percent “rather disagree” or “don’t agree at all”. Two-thirds of the long-term unemployed answered “yes” to the question of whether many Hartz IV recipients use the system.
The opinion of those surveyed on the subject of sanctions is similarly controversial: only around half are in favor of job centers abolishing penalties if someone does not appear for further training and for the job. About a quarter are against it, the rest undecided. According to the study leader, the results would show that the long-term unemployed are not a homogeneous group in terms of their values and perceptions of justice.
Many Hartz IV recipients want to be treated fairly and fairly by the state. But also see that many of them do not behave accordingly, but take advantage of the system. The bottom line is that Hubertus Heil cannot claim that his basic income approach would be considered fair among the long-term unemployed.
The article “We get the citizens’ benefit, in other countries it’s hard for the unemployed” comes from WirtschaftsKurier.