German officials proposed dividing the unemployed into "classes"
Faced with a crisis that "next year will increase the army of unemployed to catastrophic proportions," he proposed distinguishing two categories of applicants when calculating benefits – those who, before losing their job, regularly paid taxes into the social fund, and those who can be considered professional dependents – those who have never worked and exist solely on state support.
"The result that a person has achieved during his working life should give him a privilege compared to others," Alt said, apparently meaning by "achieved result" the amount accrued from the monthly unemployment insurance tax (Arbeitslosenversicherung).
According to forecasts by the Federal Employment Agency (BA), the number of unemployed will increase by 750,000 in 2010, and 450,000 will move from the category of ALG-1 recipients to "social welfare recipients" under Hartz IV. The descent down the social ladder will affect not only low-skilled workers but also representatives of the so-called middle class, mainly due to the phasing out of "crisis" part-time employment programs (Kurzarbeit). In this regard, Heinrich Alt considers it necessary to introduce a differentiated approach to benefits for the sake of "upholding the principle of fairness."
Criticism of the author of the revolutionary proposal came immediately from all sides. The idea of the vice-chief of the BA is called an "absurd step backward" at the German Institute for Economic Research. "Social insurance was conceived as an investment in emergency assistance, like a fire brigade, not as a savings fund," emphasizes DIW professor Karl Brenke. The trade unions are also dissatisfied – though for a different reason. They consider the division of the unemployed into "classes" insufficient; to save people from poverty and social isolation, they demand an increase in Hartz IV benefits for everyone. Trade union experts calculated: 440 euros instead of the current 351 per adult are necessary in the future so that the situation of the unemployed at least does not worsen compared to today.
After hearing the criticism, Heinrich Alt decided to postpone submitting the "differentiating" project to the German Ministry of Labour. However, he voiced some other ideas – and they seem to have appealed to politicians of various stripes, being quite worthy of popularization on the eve of elections. In particular, the proposal to revise the system of calculating housing benefits (Wohngeld) for the unemployed is considered "interesting" in both the CDU and the SPD. Currently, as is known, a certain "upper limit" is set for Hartz IV recipients – the maximum cost of housing that the state covers. As a result, when forced to move to a smaller apartment, the welfare recipient gains nothing financially. Alt, however, considers it possible to legalize a "lump-sum" amount of Wohngeld for a given region – under such a system, the unemployed "would gain an additional incentive to independently search for a small and cheap apartment, keeping the difference for themselves."
It is not yet known how applicable to reality this "interesting" idea will be, as well as the proposal to extend from two to three years the required 12-month contributions to social funds needed to qualify for ALG-1 instead of Hartz IV. But another idea of Alt's is already being repeated in election speeches by the right, the left, and those in the middle, addressing these speeches to the notorious middle class – tomorrow's unemployed. Its essence is to increase the "protected assets" (Schonvermögen) – a citizen's savings that are not taken into account when calculating Hartz IV benefits. Today they amount to 150 euros per full year of life lived, so, for example, if one falls through the social safety net at age 45, it is acceptable to have 6,750 euros in "nest egg," the rest must be spent before seeking help from the state. Following the trade unions, Heinrich Alt proposes increasing this amount to 520 euros per year for the sake of "guaranteeing a decent old age."
The ideas are sensible and quite election-oriented. The question is which political camp will use them effectively. And who will be farsighted enough to see the common sense in the first proposal of the vice-chief of the BA. After all, the "differentiated approach" is nothing more than a return to the system of benefits practiced before 2006: Arbeitslosengeld (its size was 60-67% of the last earnings, and the duration of payment directly depended on length of service), Arbeitslosenhilfe (53-57% after the expiry of ALG), and Sozialhilfe (for those who had not worked). The merger of the latter two into the ALG-2 model, as well as the limitation of ALG-1 to a maximum of 24 months, became the cornerstone of the Hartz IV labor market reform, virtually equating all unemployed in terms of rights, regardless of their contribution to the country's economic development.
Elena OBODOVSKAYA,
«Russkaya Germaniya»