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Targeting social welfare: Westerwelle's crusade

Start: 07.03.2010

Background: Hartz 4 - what's that?

Social security can be categorized into
1. Tax-sourced benefits provided as countermeasure for poverty / insufficient income
2. Subscription-sourced private or state-organized insurance for
  a) health services
  b) old-age and other pensions
  c) unemployment

In Germany, since about 2005 the benefit scheme for unemployment up to one year is subscription-based and state-organized. Beyond one year unemployment (longterm unemployment), the benefits are tax-sourced and regulated by two sets of laws:
a) Social Conduct Code II, termed "Unemployment money II", and
b) Social Conduct Code XII, termed "Social benefit".

The intention was
a) to secure minimal means for existence commensurate with the constitution
b) to speed up re-employment, i.e. to reduce the unemployment ratio by placing both unemployment and poverty-based benefits under the one public roof - the "employment agency" in an attempt to reduce bureaucracy and intransparency.

"Unemployment money II" was worked out by a committee chaired by Peter Hartz, and it replaced a previous subscription-based scheme. The replacement was carried out in four phases, and therefore the resulting longterm unemployment benefits scheme is colloquially referred to as Hartz 4.

Hartz 4 features set out in the Social Conduct Book:
a) If work is found for a Hartz 4 beneficiary, and he/she refuses it, then a sanction is applied (benefit reduction). This can happen repeatedly.
b) Hartz 4 beneficiaries underly continual extensive control of their living conditions.
c) Hartz 4 benefits are only given, when any wealth (savings, investment, real estate) is used up, up to a minimal amount.

Since its inception, Hartz 4 has been at the centre of heated public debates over the level of the benefit (too much to represent an incentive to take up work, or insufficient for decent existence?) and over the effectiveness in achieving quicker re-employment.

The priority goal of drastically reducing the longterm unemployment ratio via Hartz 4 has absolutely not been reached. The employment agencies have done no better than the previous employment authoritiesin helping to find jobs*. Their main raison d'être appears to be derived from improving the optics of the jobless statistics. They do this by pressing the registered jobless into programs "for the provision of work" (Arbeitsbeschaffungsmaßnahmen). By undertaking such programs, people without work are no longer classified as unemployed.

For accurate reports of the situation of social welfare in Germany, see for example Der Paritätische Gesamtverband [publications in german].

On 09.02.2010 the Federal Constitutional Court decided that parts of the Hartz 4 regulation, in particular those concerning the support for children were unconstitutional, and had to be reworked by the end of 2010. This decision supports the findings of the Paritätische welfare umbrella organization.

Enter Dr. Guido Westerwelle, chair of the Free Democrats, vice chancellor and foreign minister

Guido Westerwelle took the Court ruling as an excuse to launch an all-out tirade against the recipients of Hartz 4 social welfare. A recurring theme was the claim that the level of welfare was too high to motivate anyone to do "honest work", that the recipients were relaxing in a social hammock, and that the hard working middle class was robbed of all motivation to work because of the inordinately tax rates - taxes that keep the Hartz 4 crowd in comfort. It looks as if Westerwelle has adopted the traditional stance of the US Republicans. Westerwele translates the "hard working American, Joe the plumber" into german as "Claudia, the hard working waitress" who, together with her two children has to work beneath Hartz 4 level. See for example the Spiegel commentary George W. Westerwelle [german].

See also source [1] of the
  • Eulenspargel-Weblog contribution:   "The statue of liberty is a donkey"

  • Westerwelle's provocations and those of flanking personalities** must be seen against the dwindling popularity of this party after the barren first 100 days in tenure, and against a coming state election. The intellectual emptiness of Westerwelle's polemic hardly invites commenting. But the Paritätische has itself gone through the excercise and has published the results. These refute the completely false picture that Westerwelle et. al. have been throwing at the media since the Court decision:
    Press statement of the Paritätische welfare organization "Severe criticism of the social welfare debate - Paritätische expertize proves: The income difference between low-paid work and welfare benefits is adequate", includes a detailed report [44 pages; german].

    But maybe the press is not doing justice to the chair of the FDP. During the 5 years of the previous election period his ideas were much sought after. For his valuable thoughts, businesses paid Guido Westerwelle > €7000 per talk in 35 invitations, altogether > €245,000. How much more is undisclosed. See source [11].


    *) For a TV report a journalist and the manager of a construction company conducted a test. The manager provided the employment agency with a job offer, and the journalist registered as jobless and uploaded a resumé that fitted exactly with the manager's job description. Several weeks later the agency still had not correlated the two. Interviews with representatives of the employment agency brought no lucid explanation. See [12]

    **) E.g.
    1) Martin Lindner, a bavarian FDP MP. After the Constitutional Court decision he warned that raising the Hartz 4 level would lead to fewer people wanting to work: "I don't want us to discuss a new incentive system in which you can get money by having children" (Eulenspargel: nothing whatever in the Court ruling said anything about raising the Hartz 4 level). See sources [3, 4].
    2) The Karl-Bräuer-Institut (institute of the organization of taxpayers: www.karl-braeuer-institut.de), and the Kiel Institute for the World Economy (www.ifw-kiel.de). Both have published falsely calculated case examples with the intention of proving that people in various sectors of the economy were better off getting Hartz 4 benefits than working. See source [10].


    Sources [german]:

    [1] Bundesagentur für Arbeit, 01.12.2009, "Der Arbeitsmarkt im November 2009". Download pdf file (240KB)

    [2] wiki "Arbeitslosengeld II"

    [3] Bundesverfassungsgericht "Pressemitteilung Nr. 5/2010 vom 9. Februar 2010: Regelleistungen nach SGB II ('Hartz IV- Gesetz') nicht verfassungsgemäß", 09.02.2010

    [4] FAZ "Rufe nach Hartz-IV-Kürzung aus der Koalition", 10.02.2010

    [5] Open letter from the MP Klaus Ernst ("Die Linke") to Dr. Guido Westerwelle. Download pdf file (162KB)

    [6] Die Welt "Hartz-IV-Debatte: An die deutsche Mittelschicht denkt niemand", 11.02.2010

    [7] Der Spiegel "Sozialpolitik - Westerwelle holzt weiter in der Hartz-Debatte", 12.02.2010

    [8] Bild "Hartz-IV-Attacke Merkel auf Distanz zu Westerwelle", 12.02.2010

    [9] Die Welt "Finanzminister: Schäuble lehnt Anhebung von Hartz-IV-Sätzen ab", 13.02.2010

    [10] Paritätischer Gesamtverband "Heftige Kritik an Sozialstaatsdebatte Paritätische Expertise belegt: Der Lohnabstand ist gewahrt", 01.03.2010

    [11] Bundestag-Webarchive "MPs of the 16th election period 2005-2009"

    [12] Video "ZDF Reporter unterwegs" 25.03.2010 [german]



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