The new citizens’ income: Funding has priority over demands – politics

In politics, heated arguments about details often obscure the real purpose of a project or reform. When the new citizens’ allowance was decided at the end of last year, a core concern of the SPD, with which they finally wanted to overcome their Hartz IV trauma, the Union focused primarily on what they considered to be overly generous regulations on protective assets and sanctions against those affected if they disregard the legal requirements. In order to get the law through the Bundesrat, the government had to accommodate the Union on various points.

The actual aim of the social reform, on the other hand, played almost no role in the political discussion: to finally eliminate the base of long-term unemployment by setting a new course. In the future, placement in any job, which is often short-lived, should not be the priority, but the expansion of qualification and further training measures in order to make those affected fit for the labor market in the long term.

On paper, the Hartz reforms also wanted this. “Challenge and support” was the motto back then, when unemployment and social assistance were combined. The demands worked well, and a sanctions regime was established that many who lost their jobs through no fault of their own felt as relentless, unfair and degrading.

The qualification of the long-term unemployed is stagnating

As far as funding is concerned, opinions differ greatly. It is true that the number of unemployed, which was almost five million in 2005 when the Hartz reforms were introduced, has fallen sharply to almost 2.6 million in March. “The basic claim that the Hartz IV reforms have not brought any success is simply incorrect,” says Bertram Brossardt. He is the general manager of three Bavarian business associations and sits on the board of directors of the Federal Employment Agency (BA).

Experts who have been dealing with the complicated matter of further training for years see things far less rosy. “One to two thirds of the long-term unemployed are among the low-skilled,” says political scientist Wolfgang Schroeder from the University of Kassel. And in the case of the low and weakly trained groups, there is “a stagnation in qualification measures”.

In fact, according to BA statistics, only 705,000 of the almost 2.6 million unemployed in March took part in support measures, 38,000 fewer than in the same month last year. Instead of demanding and promoting, it should now actually be: promoting and promoting.

Continuing education is highly fragmented

Because experts are convinced that further training and qualification are fundamentally useful. That was shown by most of the studies on the subject, says continuing education expert Thomas Kruppe from the Institute for Labor Market and Vocational Research (IAB), which belongs to the Federal Employment Agency. “Even supposedly useless offers can be useful because you learn to keep at it and have a sense of achievement,” says Kruppe.

The sociologist considers the accusation that many long-term unemployed have settled into the previous Hart IV system and do not want to work at all to be a prejudice. “The argument that there is an unattainable bottom among the unemployed is not true.”

The biggest hurdle is the continuing education system itself. According to Schroeder, Germany got into continuing vocational education very late. “For a long time, further education was considered a nice-to-have, along the lines of: let 1000 flowers bloom.” Further training is offered from all possible sources, “but you don’t know what’s in it”.

Krupp also considers the system to be “strongly fissured”. How rugged becomes clear from a study that Schroeder and Kruppe wrote together with other authors in 2019 for the Heinrich Böll Foundation. It speaks of a “fragmented, almost unmanageable landscape of further education” in which “around 25,000 providers offer their services”.

According to the study, a data report by the Federal Institute for Vocational Training (BIBB) from 2018 lists 220 further training regulations regulated by federal law and other state law provisions for further training qualifications, not all of which are recognized nationwide. In addition, there are around 2,600 regulations from individual chambers of industry, commerce and crafts regarding further training and retraining, which often only apply to the area of ​​the respective chamber. A “historically grown lack of structure”, according to the Böll study.

The study therefore calls for further education in Germany to be expanded to become the fourth pillar of the education system with equal rights alongside school, training and university. “A good idea, but very difficult to implement in Germany because there are a lot of players here,” says former SPD chair Andrea Nahles, who has been chair of the BA since August 2022. The Federal Agency is currently in the process of creating a further training platform with funds from the Ministry of Labor and Social Affairs, which is to include all further training offers.

The Citizens’ Income Act also offers a number of levers to attract low-skilled people to further training. In this way, the previous mediation priority is largely abolished. Up to now, it has obliged the job centers to first find a new job for the unemployed before considering suitable qualification measures. The so-called integration rate, with which successful placements were recorded (and which ensured particularly successful case managers good assessments), no longer exists.

The scope of the BA for funding is to be expanded. “We can now promote basic skills better,” says Nahles. It is important, however, that the BA also gets the necessary financial resources for this. There should be financial bonuses for those entitled to citizenship benefit who take part in further training measures.

So far, qualification measures have often failed because the participants had to make do with the Hartz IV rate for the duration of the training, which is why many have opted to find a new job instead. Vocational qualifications can also be obtained in three years instead of the previous two years. Nahles also wants to remove hurdles when dealing with those affected. “We want to change the language of the notifications,” she says.

But there must also be changes in the job centers, Schroeder and Kruppe believe. “The case managers also have to qualify,” says Schroeder. It won’t be that easy in practice. Because what hardly anyone knows in public: 104 of the 405 job centers are not under the authority of the BA, but are run by the municipality. Hesse’s Prime Minister Roland Koch pushed this through as part of the federalism reform decided in 2005.

In these 104 so-called option municipalities, the BA “has no influence on how the citizen’s income is implemented there,” says Nahles. And in the other job centers, further training ordered from above is not so easy either, because employees from the respective municipalities also work there. The BA can offer employee training, “but whether it is accepted is voluntary,” says Nahles.

It is clear that further training is essential in view of the shortage of skilled workers and the consequences of digitization in the world of work. “We need a jump into a modern training landscape,” says Nahles. For employer representative Brossardt, further training is “a task for society as a whole that must be clearly promoted”.

The citizen income reform could be a litmus test of whether this will succeed. “If you take the change to basic income seriously,” says Wolfgang Schroeder, “it’s tantamount to a revolution.”