Germany’s left-wing government has introduced a blitz of social welfare reforms more and more attractive to the point that it is becoming hardly worth working. The policy has confounded economists and business leaders, who say the government acknowledges there is a lack of workers, but nevertheless provides ample incentives not to work. Instead, it has turned to promoting immigration.
A column from Dorothea Siems in Die Welt notes that for many single parents, low-skilled workers and migrants, the labor market has created an absurd situation, with Siems writing: “The state is acting as a caretaker, but it is keeping the recipients dependent instead of helping them to gradually stand on their own two feet.”
The left-wing government has essentially taken the position that in the fight against poverty, there is only one solution: higher cash benefits. In the past few weeks, it has introduced increasingly generous social benefits. On Aug. 28, Lisa Paus, the Green federal minister for family affairs, presented her basic child allowance, which will bring higher cash payments to low-income parents. One day later, Labor Minister Hubertus Heil announced a 12 percent increase in the citizen’s income.
“With the drastic increase in the citizen’s income, the coalition is actually increasing the problem. The increase is far above the inflation adjustment. Basic income support is pulling ahead of wages. CDU parliamentary group vice-chairman Jens Spahn is therefore right when he speaks of a wrong signal to millions of working people. Already now, a household of four receives as much from the citizen’s income plus housing costs as an average-income family has at its disposal,” writes Siems.
At the same time, several education studies published in recent weeks have demonstrated a dramatic decline in Germany’s schools. The main sufferers are children from poorer households. One of the main problems facing school districts is the dramatic increase in foreigners, many of whom lack a command of the German language. Ethnic Germans are being displaced in most schools across the country, and in many districts, German school-age children are not only the minority, but in some cases, also completely gone.
Alarm bells are ringing over the government’s agenda, which has overseen a steady decrease in educational standards while also overseeing the deindustrialization of Germany. The government’s claims that immigrants will help fill in the labor market gaps are being contested by data that shows that half of the over 1 million migrants who arrived in Germany in 2016 still remain jobless, and many who are working now work in low-income areas that leave them eligible for social benefits. The costs are enormous, with Germany planning to spend €36 billion this year alone on housing, education, healthcare and social benefits for Germany’s exploding migrant population.
The increase in social benefits is likely to worsen the situation, as the same migrants that the left say will save the job market have even less incentive to work than before, with many of them already choosing the path of unemployment. Germany’s tax burden for companies and individual households is enormous while inflation further erodes purchasing power.
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She adds that for single parents and low-skilled workers with several children, in particular, “it is often not worth taking a job.” The reason is that those who work in a small part-time job lose their social benefits.
“As a result, people receiving the citizen’s allowance who are in gainful employment usually earn only pocket money.”
Die Welt notes that there are 2 million people deemed capable of working that live on the citizen’s income, which is the term for the welfare benefit doled out by the sates. Nevertheless, job openings remain across the market, with companies unable to find workers for simple jobs that many of these people could fill, including work in hotels, restaurants and in retail.
As the baby boomer generation races towards retirement, Germany’s working-age population is expected to plummet, leaving a smaller share of workers that will have to carry a heavier tax burden.
The government is creating a “worse-case scenario” where “a divided labor market with a shortage of skilled workers and millions of people unemployed” see no point in working.
Furthermore, the government is creating the conditions necessary to justify a rapid increase in migration, as those Germans who have a comfortable citizens income lose the incentive to work, thus increasing the incentive to look abroad for workers.