Germany saves unemployed people from cuts

Germans will have ten euro more in their pockets. Or at least this is true for those benefiting from social welfare allowance. The German Government has, indeed, given its authorisation to increase of 2.74% – ten euro – the amount of the social and unemployment benefit, the so called Hartz IV.

Therefore, annually, there will be a constant increase of about 1.8% but this time the Government released a surplus equal to 0.99%. This decision is due to the general price and wage rise.

From January 1st, 2012 the “Regelsatz”, the basic subsidy rate, will be equal to 374€/month. A small sum considered singularly, but looking at the data in their complex, the amount of money allocated by the government to this measure is really huge. In Germany, indeed, 6.3 million citizens benefit from Hartz IV, and such an increase will cost taxpayers 570 million euro.

But what measures reducing social disorder make German welfare system one of the most effective in Europe?

The current German welfare system is the result of a reform developed in 2002 by a commission of fifteen experts headed by Peter Hartz. Since January 2003, the laws elaborated by such a commission have completely changed German labour market. Mini-jobs (part-time jobs for up to €400) have been created, regional job-centres have been strengthened and the former “Employment Institute” has become the current “Employment Agency”. In addition, initiatives aiming at developing local welfare systems have been implemented, in order to promote a case oriented approach to solve jobseekers’ problems.

Hartz VI came into force at the beginning of 2005 and included all previous benefits for unemployed people in a single welfare allowance. The State, therefore, provides those who obtain this benefit an unemployment economic support and health insurance and pays the rent for a “decent house”, a 40-50 square meter apartment for single people or bigger house (up to 90 square meters) for a family of four people. Naturally, if there are dependent children, the amount of money monthly received is higher.

All those residing regularly in Germany can apply for such a benefit, which can last up to 18 months (24 months for people aged over 58). During this period the recipient is supported by a job-centre that helps him or her to find a job and personal initiatives are rewarded as well. For every spontaneous candidacy there is an extra of 5 euro.

Therefore, everyone is supposed to be satisfied. Not at all. Since its introduction, Hartz reform has been sharply criticized. There exists for instance a facebook page called “gegen Hartz IV” (against Hartz IV) gathering around 3700 followers. The most common and cross-party criticism is that the strong reduction of unemployment rate (according to the data released in July, there would be 255 thousand unemployed people less compared with 2010) has been achieved thanks to the spread of the so called one-euro-jobs, part-time underqualified jobs that do not give workers any opportunity of professional growth. A more recent criticism concerns the costs related to the reform that would have been underestimated and which, on the contrary, keep on increasing every year.