In 2019, the federal government started a new attempt to help people who have been left behind to work. Anyone who hires someone who has generally received Hartz IV for six years or more will initially be reimbursed their entire wages and social security contributions. A new study has now confirmed the success. But some things have to be changed.
Those who have been unemployed for a long time because they may have been ill, addicted, had psychological problems or could not find care for their children often have little prospect of a job. An aid program that has been in force for two and a half years changes something that has been christened “Participation Opportunities Act” in the always polysyllabic social spokesman. In May it promoted over 40,000 jobs with wage subsidies. This means that it only reaches a maximum of eight percent of the unemployed who are eligible for funding. This is shown by an unpublished study by the German Trade Union Federation (DGB), which the Süddeutsche Zeitung is present.
Before the start of the project, the Federal Employment Agency had estimated the number of citizens that could be promoted to be between half a million and just under a million. In contrast, the 40,000 pale a bit. “There is still room for improvement here,” says DGB board member Anja Piel. “The program is too small. The jobs supported should be expanded in order to open up new perspectives for more people who do not have access to the labor market.”
Basically, Piel is full of praise for the program of Labor Minister Hubertus Heil (SPD). “It is a very good approach to offer publicly funded work to citizens who otherwise have little chance on the job market. Two out of three of those funded thereby overcome the Hartz IV relationship.”
The Institute for Employment Research (IAB), the scientific arm of the employment agency, also issued a positive report in spring. Heil reached the right target groups, long-term unemployed mostly without a vocational qualification, who are often older. The program is innovative and enriching for integration into the labor market. And the accompanying coaching helps to stabilize the job and everyday life.
Employers get their wages reimbursed for two years. And only let projects run that long
However, the DGB study still sees some shortcomings. The promise of funding over five years is rarely kept. More than half of the jobs funded are therefore limited to a maximum of two years – i.e. exactly the period in which the employer receives 100 percent of the wage reimbursed.
This is partly about deadweight effects. Companies send someone away as soon as they no longer receive the full cost. In the case of employers oriented towards the common good, it is different, according to the DGB. Often they could not help finance the wages from the third year onwards because they offer socially meaningful services that would hardly bring any income.
Trade unionist Piel therefore calls for such employers to be promoted more publicly so that the unemployed could work for them longer. “A longer period of time gives the long-term unemployed sufficient time to experience positive development steps,” says Piel – and demands that subsidies only be given to jobs that have been running for at least four years.
The DGB study is also bothered by the fact that only 40 percent of jobs are occupied by women. They make up half of all possible candidates. And although more than a third of the employable Hartz IV recipients have a migration background, they only account for a good tenth of the subsidized jobs. Piel wants to change both: “The job centers should target more women and unemployed people with a migration background.”