Welfare state: work is more than salary – economy

Carsten Linnemann was outraged. A family with three children and a sole earner with a low income will have 880 euros less per month than someone who does not work and receives the planned citizen’s benefit. “Isn’t working in Germany worth anything anymore?” the CDU deputy chairman recently complained on Maybrit Illner’s ZDF talk show. It was the prelude to a further escalation in the dispute over citizen income, which reached a new high point in the heated debate in the Bundestag this week.

Initially, the big social reform of the traffic light coalition got off to a good start, there was support from well-known experts and associations, the goal of taking the fear out of the Hartz IV system and giving the welfare state a more citizen-friendly approach won sympathy points. Citizens’ income should be less threatened with sanctions and more subsidies, there is additional money for training or further education, the placement priority, which has often forced people into unskilled jobs, is no longer applicable. And: People are allowed to stay longer, two years, even in large apartments and keep a considerable fortune. That could take people from the middle class in particular the fear of falling quickly.

In the meantime, however, many associate the basic income with a more left-wing naive project, with which, of all times, when many companies cannot find people, people are supposedly being seduced into doing nothing. It is a heated debate in which example calculations are used, but which raises much more far-reaching questions: To what extent should the welfare state help low-income workers? And is the value of work only measured by what goes into the account at the end of the month?

The case studies

The sample calculations by the Kiel Institute for the World Economy (IfW), to which CDU Vice Carsten Linnemann referred, convey the same message that the CSU had previously conveyed with reference to a representation of the Focus had spread: Soon all the effort will no longer be worthwhile for people with low earnings, they will be better off financially if they stay at home and collect citizen benefits.

Looked sympathetically, this is an innovative way of characterizing the situation, because these examples only take into account wages and individual social benefits such as child benefits, but omit others such as child allowance for low earners. That’s a bit like looking at income without income taxes, although that makes a big difference in the end. Viewed less benevolently, one would therefore speak of case studies that lead astray. For the question of whether someone has an incentive to go to work, it is not just the earnings that are decisive, but the sum that is ultimately available, including social benefits. The CSU example, for example, omits the child supplement and the housing benefit in its comparison, as the German Trade Union Confederation (DGB) explained in its counter-calculation.

For this reason, the IfW Kiel also withdrew its study, to which Carsten Linnemann referred. Services such as the planned higher housing allowance were not taken into account and the scenarios are now being recalculated, Ulrich Schmidt, a co-author of the study, admitted contritely. Such methodological questions are of less interest in the political debate. CSU boss Markus Söder continued undeterred on Friday. Citizens’ income disadvantages “the lower income groups who work hard” and in the end “have to realize that not working is almost as lucrative as working,” he told the newspapers of the Funke media group.

Scientists from various research institutes, on the other hand, point out that people who work usually have more money at their disposal than people who only receive Hartz IV or citizen’s income. There is a simple reason for this: Hartz IV and citizen’s income are considered the subsistence level. Those who earn less have the right to get the difference from the office. And he or she has the right to additionally keep a part of the self-earned money. These so-called additional earnings limits are also to be made more generous in the citizen’s income. Work will therefore be even more worthwhile.

“It’s a fairy tale that people on citizen income get more money than when they work,” says Marcel Fratzscher, President of the German Institute for Economic Research (DIW). Even as someone who tops up their wages with the citizen’s income, you regularly have more in your pocket. “It would have to be a very unusual constellation for the result to be different,” says Fratzscher. Researchers from the Ifo Institute in Munich had also come to the conclusion in calculations for the SZ that work is usually financially worthwhile.

And that’s even more than in the Hartz IV system, because the minimum wage has risen proportionally more than the basic income, which is expected to increase by a good 50 euros to 502 euros a month on January 1 for singles.

Suspected help recipients

However, the debate is not limited to sober numbers, it is also changing the climate towards those who receive help. The question is once again being discussed as to whether we are dealing here with lazybones who can only be persuaded to work productively with a firm hand from the state. Citizens’ allowance recipients are suspected of intentionally not wanting to work. In this reading, the basic income is a violation of the sacrosanct performance principle in the country. “If the impression is created that an unconditional basic income is being abused here, then this is felt to be unfair,” says DIW President Fratzscher. The dubious case studies gave the impression that beneficiaries who were unwilling to work were the norm. “This is how you turn those in need into perpetrators. Such political behavior is irresponsible.”

How the unemployed think and act and what effect government interventions have had on people has been researched for many years. The current debate is a good occasion to recall the results once again. The vast majority of the unemployed want to find work again, and that also applies to people in the Hartz IV system. The experts largely agree on this; also researchers who nevertheless advocate sanctions against those receiving assistance, such as the deputy director of the Institute for Labor Market and Vocational Research (IAB), Ulrich Walwei. Because it’s not everyone who wants to work – and for them cuts in money are a necessary tool.

For the others, however, work is more than just getting money into the account. A job can create meaning, open up friendships with colleagues, contacts with customers. Doing nothing and raking in social benefits, apparently most recipients of state aid do not see that as a purpose in life. That’s why the answer to Carsten Linnemann’s question as to whether work in Germany is “actually worth nothing any more” is: Apparently it is, but it can’t just be measured in euros – and certainly not in questionable calculation examples.

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