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Incentive to unemployment? The citizen money plan divides politics and business

The job market is at a tipping point.

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Incentive to unemployment? The citizen money plan divides politics and business

The job market is at a tipping point. At almost two million, the number of vacancies is higher than ever and could soon be higher than that of the unemployed.

The lack of labor has become a phenomenon affecting society as a whole. At the same time, millions of workers will retire in the coming years, creating further gaps in the system.

How to react to this is debatable. The federal government and business are largely in agreement that Germany needs more immigration.

However, the question of how “domestic potential can be leveraged”, as labor market experts say, is causing controversy. In addition to the question of a higher retirement age and the employment rate of women, one major reform is mainly up for debate: the idea of ​​Federal Labor Minister Hubertus Heil (SPD) for new citizen benefits as a successor to Hartz IV.

There is still only a draft bill, but the first innovations should already come into effect at the beginning of 2023. The Greens and SPD support the initiative, the FDP is bothered by individual points.

Now it is about what is actually decided by the Bundestag. In order to influence the design, the Confederation of German Employers' Associations (BDA) has now spoken out. It is hardly surprising that the association has criticized the reform. What is remarkable, however, is the harsh tone of the criticism.

“The previous draft is fatal in terms of labor market policy. Bridges are being built to unemployment - that's the opposite of what is required," said BDA Managing Director Steffen Kampeter on Tuesday.

“We are panting from record to record for vacancies. The job market has completely turned around since the coalition agreement was signed. But that has not yet reached the minds of some of those involved.” Heil's plan was a “failure and a large-scale label fraud,” rumbled Kampeter. The labor market will be badly damaged, he predicted.

The most important planned changes to citizen income include a new “waiting period” for housing and assets. In the first two years, benefits are granted if there are no "considerable" assets, which are estimated at 60,000 euros.

In addition, the "protected assets" will be increased - for example, the appropriateness test for the vehicle will no longer apply and the allowance per person in the benefit community will be increased to 15,000 euros. The six-month "period of trust" during which sanctions are excluded is new. Only in the case of "breaches of trust" after the six months should the job center set binding obligations to cooperate.

Additional benefits include a monthly "further training allowance" of 150 euros and a "citizen's allowance bonus" of 75 euros for participation in "measures that are particularly important for sustainable integration".

The "social labor market" is also to be given an unlimited term - so far it was only decided until 2024. In general, recipients of the basic income should be able to concentrate more on further education and job search.

Kampeter thinks the opposite is likely. "Within the first two years, the regulations lead to a largely unconditional basic income," he criticizes. If wealth is not taken into account and the adequacy of the apartment is automatically recognized, the state helps people who should not be given priority.

“It will lead to misunderstanding among the population. Hard-working people who don't have wealth are funding the expanded wealth preservation of those who will benefit from the new rule."

There is also the threat of “early retirement”. "The already possible 24-month unemployment benefit in connection with the generous asset protection during the waiting period and the waiver of claiming an old-age pension with a deduction builds a bridge to the deduction-free pension for older people," it says.

The cancellation of the sanctions in the first six months is also incomprehensible, even for "total refusers", as Kampeter calls them. “That gives the wrong impression that it is okay to refuse participation, such as participation in a measure, without a comprehensible reason.” The periods of trust are counterproductive for integration into work.

So far it is unclear what the citizen's allowance will cost. Because the FDP and SPD are still arguing about the future level of the rates. Kampeter already fears the worst: "The additional costs mentioned of around 4.5 billion euros by 2026 do not even take into account the economic damage caused by the withdrawal of employment from the labor market, which is caused by early retirement and a lack of activation." The costs are considerable, without that there is a recognizable added value in terms of labor market policy.

"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with the financial journalists from WELT. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.

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