At the turn of the year, citizen’s allowance will replace basic security. The Bundestag and Bundesrat decided this Friday. However, the abolition of Hartz IV does not solve a major problem of justice.
Hartz IV becomes citizen income. From January 1st, single people will receive 502 euros per month. In addition, the state pays the rent and heating costs. There are additional services, for example for pregnant women or single parents, as well as additional benefits such as the waiver of the broadcasting fee. In addition, many local authorities offer concessions on visits to the swimming pool or the theater to recipients of citizen’s income.
These benefits are not only enjoyed by the long-term unemployed, for whom – depending on age and contribution payments – the unemployment benefit I expires after 12 to a maximum of 24 months. This basic security is also available to all those in need of help between the ages of 15 and 67 who have no income from work and no significant assets.
In practice, this can lead to the following constellations: A skilled worker who has worked and paid contributions for 30 years receives 502 euros after the unemployment benefit expires. The same applies to a 30-year-old who dropped out of school and has never worked a single day, apart from the occasional undeclared job. Also, unlike the 50-year-old, this recipient of citizen income has ever paid only a single euro in taxes and social security contributions.
That looks like a glaring injustice. That was the case with Hartz IV and it will remain so with citizen income. Because the basic security should cover the subsistence level. The Federal Constitutional Court speaks of a “fundamental right to guarantee a subsistence level that is dignified by human beings”, which results from the guarantee of human dignity in Article 1 of the Basic Law and the welfare state principle in Article 20. In other words, paying out less than the subsistence level on a permanent basis would be unconstitutional.
If you wanted to avoid people with many years of work under their belt being in the same good or bad financial position as fellow citizens who are staying away from the labor market, you would have to stagger the citizen’s income. Then the standard rates would be all the higher, the longer a recipient has previously worked and paid contributions. But then we would be back in the time before Hartz IV.
As a reminder, before 2005, the unemployed could receive 68 percent of their net salary as unemployment benefits for up to 32 months. They were then entitled to 58 percent as unemployment assistance until they retired. This regulation was fair insofar as the amount of the remuneration reflected the previous work performance. At the same time, it was unfair because some formerly well-paid skilled workers were better off financially than, for example, poorly paid nursing staff or full-time cashiers.
The regulation at that time had another disadvantage. Those who stayed away from the labor market for a long time with relatively high support payments found it difficult to reintegrate later. Also, many long-term unemployed were unwilling to take up jobs that did not meet their wishes and expectations or that would have earned them less than they did before they became unemployed.
The result: in 2005, 4.9 million were registered as unemployed. After the introduction of HartzIV, their number fell to 3.2 million within five years. Despite some design flaws in the Hartz laws, the principle of “promoting and demanding” has proven its worth. In other words, the “unjust” system at the time ensured significantly higher employment, which also benefited economic growth.
Due to the equal treatment of unemployed and non-working people required by the Basic Law, the basic income is and remains just as “unfair” as Hartz IV. Since 2005, however, there has been an important change in the potential recipients of the basic security. The first “Hartz IV class” consisted more or less of Germans. In the meantime, many EU citizens, especially from former Eastern Bloc countries, and immigrants from countries outside the EU have arrived. Under certain conditions, they are entitled to this transfer benefit.
Here are a few figures: In 2015, 4.6 million Germans and 1.3 million immigrants (both adults and children) received Hartz IV benefits. In the meantime, the only three million Germans are faced with 2.4 million foreign beneficiaries. The wave of refugees in 2015/16 and the recent influx from Ukraine are reflected here. Around three quarters of the employable Syrians living in Germany live entirely or partially on Hartz IV. More than 600,000 Ukrainians are also among the customers of the job center.
That’s just the way it is with justice. In the time before Hartz IV, things were fairer – at the price of much higher unemployment and an unfairly high burden on workers. The equality of recognized refugees with German beneficiaries, on the other hand, contradicts the concept of justice of many taxpayers, but has nothing to do with Hartz IV or citizen income. This is the result of the German “we can do it” policy of largely open borders.
One thing, however, should be certain: Our transfer payments, which are high by European standards, make Germany the dream country of many who are fleeing war or are simply striving for a better life than at home. In any case, nobody comes here because of our climate.
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