€1 Jobs for Germany′s Unemployed? | Business| Economy and finance news from a German perspective | DW | 20.08.2004
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€1 Jobs for Germany's Unemployed?

To ease the pain of its new unemployment benefit cuts, Germany's economics minister, Wolfgang Clement, has floated a proposal to create so-called one-euro community jobs for the long-term unemployed.


Thousands of jobless people may help out community organizations

The program would be designed to help long-term unemployed facing benefit cuts to augment their monthly government check with extra income. Germany's new Hartz V labor law does not stipulate how much workers should be paid for the jobs, but Clement has suggested that welfare recipients be paid one to two euros per hour.

According to Clement's calculations, the jobs could help someone on reduced benefits earn an additional €850 to €1,000 ($985 to $1,230) per month.

But some critics, including Michael Fertig, research coordinator at the Rhine-Westphalian Institute for Economic Research in Essen, believe Clement's numbers are "unrealistic."

Relief or a pipe dream?

Combined with the benefits that will remain in place, the jobs could help take some of the sting out of the planned welfare cuts, which have led hundreds of thousands of Germans in the eastern part of the country to take to the streets in protest in recent weeks.

Under the new law, long-term unemployed who refuse jobs can have their welfare benefits reduced. If a person is under 25 years of age, the government can cut all support except the monthly housing reimbursement and non-cash benefits. A person is required to take any legal job. A special morality clause, however, ensures that unemployed will not be forced into prostitution -- which is legal and regulated in Germany.

Wolfgang Clement Jahreswirtschaftsbericht

Wolfgang Clement is turning up every stone he can find in the desperate search for work for Germany's more than 4 million jobless

The program envisions work being offered by community job creation companies and non-profit organizations. Clement (photo) said the jobs could include anything that would not put the organizations in direct competition with the local private economy and labor market. He suggested aids in kindergartens, in gardening, landscaping or city clean-up work or care for the elderly as examples of possible one-euro jobs. According to Clement's plan, the jobs would be limited to six months.

Nevertheless, critics, like Angela Merkel, head of the opposition Christian Democratic Union, warn that even those jobs will provide unwanted competition and create a shadow labor market that will pit itself against a "carefully established primary labor market."

Support from charity groups

German charity organizations are already lining up behind the proposal, including Caritas and the Diakonisches Werk of the Protestant Church, which have said they are interested in creating one-euro jobs.

"I'm counting on a considerable strengthening of public work opportunities," with as many as 20 percent (as many as 600,000) of today's long-term unemployed working in the program, an optimistic Clement told the Germany daily Die Welt earlier this week.

But the German Association of Municipalities found fault in the plan and dismissed it as "wishful thinking." A spokesman for the organization, Franz-Reinhard Habbel, told the Web site tagesschau.de that close to 350,000 Germans are employed in the types of jobs Clement has proposed and that he sees "little potential for further jobs." Nonetheless, Habbel said his organization would do what it could to find potential one-euro jobs.

"Our members are going through their institutions to see where they can create additional jobs. But it's an illusion that every fifth long-term unemployed person is going to helped in this way," he said.

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