Update on Hartz IV/welfare reform, 2005

Submitted by Steven. on November 17, 2006

Article by prol-position on the reforms of German unemployment benefit after their introduction, and the effects it has had on the working class.

The Wildcat-article (see here) was written a few months ago to understand the background and purpose of the Hartz IV-reform and the movement against it. Since then the new unemployment benefit (Arbeitslosengeld 2: Alg2) has been introduced and the municipal social security offices and the federal employment agency (Arbeitsagentur) have formed joint offices for managing those getting Alg2. From the start, problems arose. The computer programs, which for the first time combined all cases in one database with all employees theoretically having access, often worked partially or not at all. Many Alg2-notifications sent out were inaccurate, especially those sent to families. Frequently, cases weren’t processed in time so people had (and still have) to wait for weeks before getting their money. At the end of December the work agencies sent the wrong account numbers to the some banks so funds weren’t transferred in time. New case managers, who in theory should handle about 75 cases each, were trained - but so far most still handle many more.

In the upcoming months, the employment agency might manage to solve most of these problems. But what concerns the government though is that far fewer unemployed could be excluded from benefits as it hoped and predicted. (About 10 percent were cut because their partners earn ‘too much’ or else because they couldn’t conceal their bank savings in time. The government had expected to strike 23 percent off the rolls.) So the whole program is ending up costing more - estimates now range around four billion Euros - and we thus might see more attempts to purge people by different means.

The core of the reform is introducing so-called One-Euro-jobs, mandatory jobs the unemployed have to accept or else face benefit cuts up to 30 percent. The government’s goal is to force the unemployed, instead of signing up for unemployment benefits and working on the side, into taking any low-paid job offered to them. For now, the government says these jobs should be ‘publicly useful’ (Gemeinnützigkeit), that is more or less non-profit. In October the government gave the unemployed an opportunity to start working a One-Euro-job, first voluntarily. People were contracted for three to nine months work assignments in schools, libraries, homes for the elderly etc. But some are also working in workshops producing toys, in the transportation sector (moving services), in street cleaning, security jobs etc. And - as with other public work programs - quite a few ‘alternative’ projects (culture, child care...) also use this source of cheap-labor to function. The work agencies tried to pressure some unemployed into accepting these jobs; quite a few, tired of sitting at home bored, did so voluntarily. The income - a 345 Euro benefit plus health insurance, rent and utility subsidies, and an extra 150 Euro for the One-Euro-job - adds up to about 750 or 800 Euro cash in hand. This is almost the same income as an 1100 Euro job (before tax) on the primary labor market. And it’s also an income at or above the level of many low-paid jobs like security, cleaning, and fast-food.

Still, it remains to be seen how people having to give up more lucrative under the table work or having to work deadly boring, dirty, and unhealthy One-Euro-jobs will resist. The government still talks about introducing 600.000 One-Euro-jobs nation-wide, meaning that about one in two unemployed will at some point be forced into this kind of work. The new unemployed numbers published in early February show about 5 million registered unemployed. Out of this 5 million, 4 million are getting the reduced Alg2 benefits. One and a half million of these 4 million are getting Alg2 either as a wage supplement or because they have children etc., and the other 2,4 million are looking for work. These remaining 2,4 million could be forced to take One-Euro-jobs. Taking into account that these jobs last from three to nine months, in one year about half of the 2,4 million could be asked to do such work. But so far, this is all hypothetical. On one hand some politicians and bosses talk about further reducing the Alg2-benefit, pushing it below the wage for low-paid service work. They want to economically pressure the unemployed into accepting any shitty job on the ‘free’ labor market rather than trying to impose forced labor programs which could end up increasing competition for private capital in certain sectors like cleaning. On the other hand other capitalists talk about striking out the current paragraph on the ‘public usefulness’ (Gemeinnützigkeit) of the One-Euro-job. Instead, they want to include any private or public job, in this way setting up some kind of subsidized forced labor low-wage sector.

Most unemployed, though, are still waiting to see what happens. Of those now getting Alg2, two thirds get about the same money as before, with some getting even more. And, as mentioned before, far fewer than expected were cut off the unemployment rolls. With the One-Euro-jobs, some (for instance, the older unemployed who otherwise have no chance of finding a job) so far don’t see the One-Euro-jobs as a threat. That might change soon. On the other side there are reports that temporary agencies are getting more job applications. Many unemployed people are feeling threatened by the Alg2-bureaucracy, the snooping around in peoples’ financial affairs, and the One-Euro-jobs.

So far the resistance against the Hartz IV-attack includes growing incidences of violence in the work agencies, the Monday-demonstrations and a campaign by leftist groups. In the second half of 2004 there were many reports about the unemployed confronting public servants in the work agencies, sometimes verbally, but sometimes also with knifes and axes. The work agencies have since increased security. The Monday-demonstrations have died down, although protests still occur in some, mostly East German cities, with a few dozen or a few hundred demonstrating every week. The campaign started by leftists groups still goes on, with most people involved focusing on the feared impoverishment and degrading conditions of the One-Euro-jobs. To create problems for the work agencies, leftist activists at first asked the unemployed not to turn in their applications until the last minute. Most of the unemployed didn’t heed this call; the agencies had enough problems anyway and people were anxious to pay their bills. This call for petty sabotage too is a flawed tactic because it keeps actions confined to the individual level. A better and more collective tactic was the attempted ‘day of closure’ of the work agencies. On the 3rd of January there were demonstrations and blockades in front of work agencies in some German cities, but the participants were mostly political activists (many of them unemployed though) and it was hard to get the ‘other’ unemployed involved. In some instances the police (and private security forces) prevented people from entering the work agencies to hand out leaflets; in other instances people went in, put up banners, blocked the entrance, etc. After that day of action wasn’t as successful as hoped, there are still quite a few attempts to set up struggles against the further implementation of the reform. Most attempts concentrate on ‘scandalizing’ the reform by highlighting the impoverishment, and the degrading aspects of forced labor. These initiatives want people to use legal means against the work agencies, to rely on lobbying to force the political parties to rescind the reform (in order to get back to the former state of exploitation?) In Berlin some people are trying to focus more directly on the situation of the unemployed instead. They want to establish more links between the One-Euro-workers and other exploited workers with the aim of helping them start fighting against their conditions. Here is one of their reports:

Walks against the One-Euro-Jobs
We have renewed a joyous tradition of the Berlin unemployed and good-for-nothings. Since January 2005 we meet regularly for a collective walk where we do what alone we wouldn’t dare do: inspect public offices, canteens and restaurants, visit One-Euro-slaves at work and also stop by the bosses’ offices...

We do this to find out where One-Euro-jobs got established, who are forced to work them, and what people do about them. That’s why we walk to the contractors who are creating these jobs or already have done so for ‘volunteers’. In Berlin those are (among others) Caritas, AWO (both charities), Kubus, Lotech (both involved in employment agency job- and training-programs for the unemployed) and Pfefferberg (a cultural project). BSR (state-owned street-cleaning) and BVG (public transport) are also under discussion. We go to these places and distribute our leaflet to make contact with and talk to One-Euro-workers and the other regularly employed.

We ourselves are unemployed - or could be at any time. Therefore, we might soon find ourselves in such a One-Euro-program. That’s why we want to discover how we can act against the new attacks on our living conditions - the so-called Hartz IV-reform.

Report from one of the January 2005 walks
When we were about to start walking, two cop-cars were already waiting at the meeting-point... but we left them behind.

We first went to a couple of contractors who place One-Euro-workers. There we met some office-workers with limited work contracts who themselves had been previously unemployed. They assured us that they would only place people in One-Euro-jobs who want to do that work; the others could go home without any hassles. But they didn’t want to comment on how they would deal with the new conditions in January 2005 [when people can be forced into taking the jobs]. They didn’t like the idea that the industry could profit on all that. They said they couldn’t tell us any more ; instead we should go and visit their bosses.

That’s exactly what we did. But the women in that office said they were only responsible for placing people on social security in full one-year work contracts. So far they had nothing to do with One-Euro-jobs and they would not be supervising the contractor. So where were the bosses?

Next we went to Caritas which had several times announced they were creating One-Euro-jobs especially set-aside for the younger unemployed under 25 years old. At first we met office-workers in one Caritas welfare center. The women didn’t want to give their opinions on the planned One-Euro-jobs and refused to answer our questions, for instance, on what qualifications the One-Euro-workers would need for the care-taking jobs. And they referred us to the Caritas central management...

Earlier, visiting another Caritas facility, we had interesting discussions with ‘regularly’ employed people from different Caritas projects. Some child care and cleaning workers told us they feared that in the future Caritas could replace their already insecure, partially restricted contracts with One-Euro-jobs. They were interested in our leaflets, saying that they would hand them out to co-workers.

In the end the walk became really interesting when we suddenly walked unannounced into a workshop where about forty people - mostly women and, with one exception, all immigrants - were all sitting at sewing-machines making soft plush toys for kindergardens. Just like you imagine a sweatshop... All workers there were either ABM (another public works program) or One-Euro-workers (about half). Although the supervisor tried to stop us from talking to the workers and handing out our leaflets, we managed to converse with some of the One-Euro-workers. They told us they didn’t like the fact that they were denied holidays and that they didn’t get the usual sick rate at full pay. Taking ‘Blue Mondays’ wasn’t possible. But otherwise the job was easy and nobody had to work hard.

A group of six women who had known each other before told us how they got One-Euro-jobs. Each woman had received a letter from the employment agency offering this job. They decided as a group to sign up together to avoid getting placed on different jobs.

The One-Euro-workers were delighted that someone was interested in their in part-time, shitty work conditions. While we were talking to them the boss got angry and called the cops. So we left.

For sure, we will stop by that place again on one of our next walks.

Mandatory One-Euro-jobs have only been implemented under the Hartz IV-reform since the beginning of this year. So we assume that enforcement of the new requirement has just started. Only in the next few months will we probably meet One-Euro-workers who - threatened by the benefit-cuts - are being forced to take the jobs. It will remain difficult for us to find out in advance what we can expect at the different job-sites and who we are dealing with there. We want to carry on discussions with One-Euro-workers and the ‘regularly’ employed. Meanwhile, we should make it clear to the bosses that in the future they will run into problems and that enforcing One-Euro-jobs won’t happen without resistance. All in all the walks are great fun. They give you a chance to meet new people and talk and exchange information with them.

prol-position news #1, 3/2005