Federal government
How the traffic light wants to reform the welfare state
The minimum wage is set to rise to 12 euros: Christian Lindner (lr), Olaf Scholz, Annalena Baerbock, Robert Habeck, Norbert Walter-Borjans and Saskia Esken present the coalition agreement. Photo: Michael Kappeler / dpa
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Abolish Hartz IV, secure pensions and increase the minimum wage – the traffic light wants to give people security with social reforms. But the future coalition has yet to make big decisions.
A minimum wage of 12 euros, stable pensions and no more Hartz IV – when it comes to social issues, the Ampel partners rely on a little more feel-good state in the face of technological change.
For years the SPD has been working on gradually overcoming Hartz IV – now the so-called citizens’ money is to come. On closer inspection, however, there are also clear scent brands from the Liberals and the Greens – and many unanswered questions about the future of pensions and social issues.
The minimum wage should rise to 12 euros
“During the election campaign, I talked a lot about respect,” remembers the SPD chancellor candidate Olaf Scholz when presenting the coalition agreement. Now the traffic light states: “Every work deserves respect and recognition.” With the increase in the minimum wage to 12 euros per hour – today 9.60 euros – the coalition wants to send a quick signal. “That means a pay increase for ten million citizens,” says Scholz.
Since the introduction of the lower wage limit in 2015, the state has largely left the adjustments to the minimum wage commission – this is to be broken once. In future, the commission of employers and trade unions should take care of it again.
Hartz IV – the social reforms under the former Chancellor Gerhard Schröder are a trauma of the SPD. Already in 2019 she decided to turn away from Hartz IV at a party congress. Officially Hartz IV was already known as basic security or unemployment benefit II. But now there is a new name and new rules. The old and probably new Labor Minister Hubertus Heil (SPD) had already submitted a corresponding draft at the beginning of the year – at that time Heil had no chance in the grand coalition.
Now comes the citizens’ money
Now the citizens’ allowance is to be paid out in the first two reference years without checking the property or the apartment. Even during the Corona crisis, it was not checked how big the apartment of those affected is and whether they have savings of more than 60,000 euros. In the future, the following should generally apply: Anyone who is covered by the citizens’ allowance should not have to worry about the savings and the housing situation for the time being.
Obligations to cooperate for the long-term unemployed and sanctions should remain – but will be reorganized by the end of 2022 at the latest. Overall, the welfare state should become “more citizen-friendly, more transparent and less bureaucratic” – everything should be easier and digitally possible.
Pension financing theme
Pension – the statutory pension level of 48 percent should be guaranteed. More self-employed are to be included in the statutory pension insurance. The planned entry of pension insurance into investments on the capital market made people sit up and take notice when the traffic light exploration results were presented. Because today the pension insurance is mainly financed from contributions and tax revenues.
As a first step planned for the coming year: a capital stock of 10 billion euros. Here it was already said from the board of the pension insurance: A capital stock would have to be filled with “very, very substantial sums” if the pension level and contribution rate were to be permanently secured. But where should the traffic light get so much money from? More than 100 billion euros are already flowing into the pension fund from the federal government. How the pension is to be secured in the long term has therefore not been decided.
However, another project by the traffic light partners could contribute to the fact that there will be more people paying into the pension fund in the future than predicted today. Because the immigration of skilled workers should be made easier, also for non-academic professions. To this end, the traffic light wants to make the skilled immigration law more practicable and introduce a point system. Here, for example, the SPD, Liberals and Greens are likely to pull together.