Voting on a compromise: does citizen money bring about a system change?

Today the Bundestag and Bundesrat are to decide on the compromise on citizen income so that it can replace Hartz IV in January. Does this involve a system change? Experts refer to two key points in response.

Is there actually a system change with the change from Hartz IV to citizen income? The governing coalition and the CDU/CSU have long struggled to find a compromise. Now it’s about the interpretation. The parties in the traffic light coalition are still talking about a system change. The Union says it prevented this system change. How do experts judge this question?

As well as

System change or not? Bettina Kohlrausch from the WSI, the economics institute of the trade union-affiliated Hans Böckler Foundation, thinks that the answer should always be “both and”. This is mainly due to the fact that a lot changes and much remains the same in principle.

what is left

Holger Schäfer from the employer-related Institute of German Economics in Cologne rejects the term system change from the outset. His reasoning: Like Hartz IV, citizen’s income is a tax-financed basic security benefit that is also subject to conditions. These conditions have remained the same: for example, neediness, unemployment and a certain obligation to cooperate when it comes to finding work again.

In fact, the points of contention between the Union and the federal government were less fundamental than it appeared. There have always been spare assets, sanctions too, it was just a matter of how much and for how long.

In other respects, too, everything has remained the same: the amount of citizen money is rather tight, and criticism from social organizations and the left can hardly be ignored.

What will be different

Interesting are the changes that come with the citizens’ allowance and which were hardly in question when the compromise between the federal government and the Union was found.

Waldemar Dombrowski from the union for labor and social affairs represents those who will work in the job centers with the citizen’s income. He thinks that the citizen’s allowance gives the employees in the job centers the opportunity to work more intensively and future-oriented with people, and also to offer them financial incentives if they start training or retraining. At the same time, however, he also welcomes the much-cited principle of “support and challenge”, because in his opinion the job center must have something in hand when it comes to those who are unwilling. And more than the traffic light had originally planned.

advancement and evolution

Dombrowski doesn’t see citizen money as a system change. He speaks of further development. Holger Schäfer from IW Cologne sees it that way – he calls it evolution.

However, there is one point that seriously interferes with the previous system: Up until now, the aim was to find people a job as quickly as possible, at the risk of it not going well for long. Because neither employer nor employee can cope if it just doesn’t fit.

Training and retraining should have priority in the future basic income so that those affected can find a better job in the long term. And that’s where Bettina Kohlrausch from the WSI becomes fundamental: “This is a system change, because the so-called placement priority has been abolished, which means: People are not sent to work at any price, but there is a much stronger focus on qualification.” And that’s the right answer to the shortage of skilled workers, everyone agrees.

The devil is in the details

Marcel Fratzscher from the DIW economic research institute welcomed the basic income from the start. He sees a need for improvement in the amount of the standard rates. When it comes to system changes, he doesn’t want to commit himself. Not yet: “Whether there will be a system change or not really depends on the implementation – the devil is in the detail, so in other words: will it be possible to qualify those affected, to help them with their health? But basically it’s a big one A step in the right direction.”

It’s not that easy

However, according to the labor and social affairs union, this has consequences. The job centers need 1,500 more workers because it is more complex to organize suitable training or retraining than to find the next best job. So, system change yes or no?

It’s not that simple, so three conclusions: First: The experts surveyed are rather cautious with the term system change. Second: How you answer the question about the system change depends primarily on which aspect you consider most important. And thirdly: after a year of practice we know more.