One out of four Germans took a 'mini-job' last year. It's a way to earn extra cash or top up welfare benefits or wages from a regular job. But unions and employers say the booming sector has some serious pitfalls.
Mini jobs are booming despite obvious snags
With Germany's export economy booming, unemployment has dropped to record lows. But a closer look at the type of jobs workers are accepting robs the upswing of some of its luster.
Figures released by Germany's Federal Labor Agency (BA) show consistent increases in the mini-jobs sector. Mini jobs are a form of part-time employment which allows workers to earn up to 400 euros ($584) per month without having to pay taxes or social security.
By the end of September 2010, more than 7.3 million people in Germany were employed that way - 27 percent (or almost 1.6 million people) more than in 2003 when taxation laws regulating the sector were simplified.
For about five million of those people, mini jobs are their only employment. The remaining two million hold a mini job on the side, according to the BA's quarterly statistics.
But neither unions nor employers are happy with the boom in the sector.
"It is more attractive for recipients of so-called Hartz IV welfare benefits to legally hold a mini job than to find a regular full-time job," German Employers' Federation (BDA) spokesman Arne Franke told Deutsche Welle.
"The regulation creates a massive disincentive for the unemployed."
Unskilled workers can combine a mini job with welfare benefits
Johannes Jakob of the Federation of German Unions, says that, while mini jobs were originally intended to make entry into the workforce easier for many, they've since turned into a low-wage labor traps.
"At the moment this increase in mini jobs is not a good thing for the labor market," he told Deutsche Welle. "Their function as a bridge doesn't work. Mini jobs are more or less a trap - people are paid badly and have no real chances to advance."
If a mini jobber were to seek regular employment, a sharp increase in taxes would quickly nullify any gains, according to Jakob. Instead, combining welfare benefits with a tax-free mini job remains a more viable alternative.
The Left party has also urged the end of what it calls a "devastating boom" in mini jobs. Germany has become known throughout Europe as a low-wage country because of the sector, party head Gesine Lötzsch said in a statement.
The rise in the number of mini jobs has been most pronounced in the temporary work sector, where, within a year, 23 percent more people were employed that way, according to the Federal Labor Agency.
Mini-job contracts are also popular in wholesale and retail businesses, health and social services, restaurants and hotels.
And in food service, nearly half of all jobs are mini jobs, says the BA. A study by the Institute for Labor and Qualification at Duisburg-Essen University found that the same is true for the cleaning and maintenance sectors.
Author: Dagmar Breitenbach, Gerhard Schneibel
Editor: Nicole Goebel