From time to time, the four major welfare companies, the “Arbeiterwohlfahrt” (AWO), the “Deutsche Caritasverband” (DC), the “Diakonische Werk” (DW) and the “Deutsche Paritätische Wohlfahrtsverband” (Joint), raise their voices on the effects of the Hartz IV legislation and precarious employment and demand improvements. In their own companies, however, they take advantage of the inhumane conditions for their employees to secure profit. At the same time, they prevent any resistance, self-organization or trade union organization of the employees in their ranks.
In February 1975, a news report shocked people in the Federal Republic: for the first time, the one million mark was exceeded by officially unemployed people. More specifically, 1,184,000 people were unemployed at the time. After the first shock, this was generally seen as a one-off slip-up as a result of the great economic crisis, which was mistakenly called the “oil crisis”. Then, in 1982, when the two million hurdle fell, everyone realized that this was a structural development that cannot be stopped overnight.
In many cities, people engaged in labour market and social policy gathered for demonstrations. In the Ruhr area cities, the issue of unemployment was discussed very widely, as many jobs in the “Blue Man area” were destroyed. Many of the people affected who had lost their jobs did not want to resign. They organised themselves and unemployment groups and initiatives emerged everywhere. Young people without work in particular joined forces to set up their own initiatives. The unemployed people wanted to take their fate into their own hands, to fight for work and social security, against social exclusion and defamation. This movement advocated understanding unemployment as a social problem and not blaming the unemployed people themselves for their situation.
The self-organization of affected people was not desired by the political actors in the municipalities at the time. Since the initiatives were denied to be able to defend their own interests, the churches first took over domestication and in the 1980s made work/unemployment their central theme. At the same time, they completely denied their employees the same rights in their own ranks, such as the right to strike and the possibility of participation, as is customary in the public service. Then the AWO followed the trend of the inclusion of the grassroots initiatives, in parallel with the joint, which did not have to muster much energy, since many “free initiatives” had chosen the joint as their umbrella organization.
Because of the over-embrace of the welfare groups, the unemployment initiatives have run out of steam, hardly any of the countless groups in the 1980s have survived. In the meantime, the self-organised unemployment centres have also disappeared or changed hands under the auspices of the welfare companies. Thus, over the years, we have managed to nip in the bud any beginnings of self-organization and independent articulation of the unemployed people.
When the normal working relationship, under the influence of neoliberalism, gradually dissolved with the slogans of “liberalisation, flexibility and deregulation”, atypical, precarious, temporary, temporary and forced part-time employment took the place, the employees and their families could no longer have sufficient income and no longer had the necessary labour and social protection to be able to defend themselves individually. At the same time, the welfare groups have grown enormously and have developed into job engines. For them, the Hartz legislation came as a gift from heaven to spin off parts of the business, to develop new branches with “purpose companies” and to take care of all precarious employment relationships, as well as the job opportunities (AGH/1€-Jobbs).
Two of these employment relationships are considered in more detail below:
For decades, the slaves worked as part of training courses and 1€ jobbers
Since the 1990s, welfare companies and their newly established employment and action enterprises have been entering the labour market and are taking advantage of long-term unemployed people in the well-supported measures.
The people in the measures are deliberately kept away from the first labour market, also because they are well-integrated full-fledged workers for the measure-bearer and provide profit in the so-called special-purpose enterprises. Since they are not legally employed, they do not have any rights arising from a regular normal employment relationship.
They are at the mercy of the penalty possibilities of the job centres laid down in the Social Code and thus these measures violate several articles of the Basic Law, such as the right to physical integrity, freedom of occupation or the right of association.
There are people who have been suffering from special ‘barriers to mediation’ for years. For 10 or 12 years, they have always had the same employment with the same church representative. They have also gone through all the programmes that the employment service has in its offers.
In this process, mafia structures, mutual giving and taking and cheating have developed between the ecclesiastical institutions and the job centres, which are not subject to any control.
The use of the “programme staff” has meant that the employee no longer has to buy services for himself from third-party companies with tariff-based remuneration, but, for example, has the cleaning and domestic activities carried out by the lawless and defenceless workers.
These people are employed in private households and businesses, which then have to pay up to EUR 20.00 to the institution for one hour of work.
If the operation is necessary, overtime is also arranged for work opportunities, which are then paid at EUR 1.50 per hour.
For some measures, the church institutions collect up to 500.00 euros per participant per month “directing costs”. If you add up this sum per sponsor and participant and then look at how many “directors” are actually active, you will see how lucrative these funding chains are.
If, for example, additionality is not given in accordance with the somewhat stricter criteria for measures, the churches quickly produce “project references” or, for example, one can also obtain, for example, a “safety certificate” for all trades that are located in the action room from the retail trade association, which is presented to the employment service and everything is good.
In shops where goods are sold, a declaration is made that only those in need are sold or for a time goods are no longer sold, but are issued for a donation.
If some supported measures do not start, one can still switch to the ‘promotion of employment relations’ (FAV) (promotion on average 65 percent).
If it gets tight and everything is no longer influencing the employment service, the rescue can be a transformation of the whole into an integration company. The fact that this tip is not always good became clear when the insolvency proceedings concerning the assets of the ‘Diakonische Integrationsbetriebe Dortmund-Bochum-Lünen gGmbH’ were opened on 01.08.2014 (AZ: 255 IN 45/14). Thirty-four people, more than half of them with disabilities who had worked in the “CAP markets”, had to be made redundant. The result of mismanagement and, above all, lack of control of our own supervisory bodies and public donors.
A young woman was granted a loan to buy a car by the job centre shortly before her insolvency proceedings, the workplace itself was sponsored with a 75 percent wage subsidy and the employer cheekily insisted on her car because the woman had to go to medical practices as a representative for medical technology – this is what the guidelines for “free promotion” give. The employment relationship was terminated after 3 1/2 months.
Social workers are asked to produce reports on participants in the action, in which they are psychiatricised and theirs are listed the “deficits” of the individual person that still exist. The Jobcentre is to be documented in such a way that this person must still be in another funded measure. As a rule, these reports do not correspond to the truth, but merely serve the further flow of money, with significant consequences for the action workers, who become aware of this mental health finding at the job center and who pin them on for the rest of their lives.
It is common practice that dedicated personnel costs, e.g. for debtor advice, are not available for advising over-indebted people, the qualified staff positions have long since been cut and the public personnel costs paid by the country flow into unknown channels of the welfare companies.
It is no wonder that no one really wants to change the previous support practice and is glad that these workers cannot move to the first labour market, because they simply lack the jobs and are denied unemployment benefit 1.
In order for everything to continue, the decision-makers and appointees have often joined forces as superior associations. The members of the Community have agreed that they will devote themselves to ‘co-opting’ in a manner satisfactory to all member organisations and to coordinate new measures by the employment services at the planning stage.
The whole thing is a fairly closed system in which public funds are shifted and used illegally.
Social labour market: with the “Participation Opportunities Act”
On 1 January 2019, the ‘Participation Opportunities Act’ (THCG) came into force. The Federal Government provided EUR 4 billion to subsidise wage costs for companies offering jobs subject to social security contributions for the long-term unemployed. Without any discussion of labour market and social policy, the new law has made a major change in labour market policy. Recently, state-sponsored employment is open to all forms of economic organisation, including domestic private companies and groups.
The state pays companies 100 percent of the minimum or collective wage for the first two years of employment subject to social security contributions, and 90, 80 and 70 percent of the minimum or collective wage in the following three years. The criteria such as additionality, public interest and neutrality of competition have been overturned, which until now restricted assisted employment only in social and public institutions.
Around 800,000 unemployed people are expected to take up employment through this programme, thus further expanding the low-wage sector so that German companies can continue to dominate the world market.
For charities, this is a new, very effective way to keep their “purpose businesses” running.
The law provides in detail that:
a duration of the measure of five years
or a shorter time limit with optional one-time extension is explicitly permitted.
after 5 years, there is no obligation for employers to continue working, and a large proportion of those affected will return to Hartz IV.
the typical employment contract under this support is expected to initially be for two years and, if well maintained and performance, can then be renewed for three years.
only part of the employment subject to social security contributions. Since no contributions to unemployment insurance are levied, only the Hartz IV reference is possible in the end and the Hartz IV system takes effect again. Unemployment benefit 1 does not have to be paid under SGB III and there are no placement costs.
the job centres, together with potential employers, decide which person has to take which job. The compulsion to work on the part of the job centres is contrary to the self-determination of the individual.
an offer cannot be rejected. Any refusal is followed by the sanctioning by the job centres.
the minimum wage, even full-time, is about 1,550 euros gross, too little to live for and too much to die. You can’t feed your family on it.
it is a labour market policy measure and does not create an employment relationship. Violations of labour rights and health and safety at work are thus pre-programmed.
in the course of the employment of additional job seekers, regular employment is displaced to a not negligible extent and existing competition is influenced.
participants in the action can be removed from the measure by the employment service, e.g. for training or other work
and that the employees are still under the thumb of the job centres. As this is a labour market policy measure, they are subject not only to their companies but also to the “support” provided by the job centres throughout the period.
Sanctions can also apply here
Paragraph 31 of the SGB II stipulates under the term “duty violations” that long-term unemployed people can be sanctioned by the Jobcentre if, for example, they do not accept or interrupt a measure. Any refusal is followed by the sanctioning by the job centres. This can lead to people no longer receiving income at all, depending on how much percentage is removed from the current salary.
Sanction is always punishment and legitimacy at the same time. One thing is being punished and the other is that people have the right to do so. Without sanctions, the Hartz IV system would lose its effectiveness and deterrence as a means of reducing wages.
Freedom of occupation guaranteed by the Basic Law is undermined
The freedom to work guaranteed by the Basic Law is also affected when people are forced to accept any work, employment or measure. The aspect of the freedom to practise guaranteed by the Basic Law has almost never played a role in the discussions on sanctions mechanisms that have been going on for years. The people who are in hartz IV are constantly under pressure from possible sanctions, because any jobcenter placement proposal can be an “unsustainable offer”.
They do not have the freedom to choose a career. The SGB II provision of Section 10 (2) is applied here. According to this provision, any jobless person is reasonable and can only refuse job offers in exceptional ways, e.g. only because of special physical requirements or because of the danger to the child’s education. Explicitly not an “important reason” for rejecting a placement offer should be that the “working conditions are less favourable” than the conditions of the previous employment relationship. This is the lever used to force workers into the low-wage sector under government coercion.
State-subsidised temporary agency work
What is also new about the Participation Opportunities Act is that temporary employment agencies are not excluded as beneficiaries. The industry, which is already the largest buyer of long-term unemployed people and a beneficiary of Agenda 2010, drummed the law the loudest. The ‘Interest Association of German Temporary Employment Companies e.V.’ (IGZ) already offers seminars and publishes a brochure to provide its members with instructions on how to exploit the new funding pot. Because the new law makes the dreams of this industry come true. From now on, you can hire a person for 24 months, have the full wage costs paid by the state and collect the money they receive for the award of the employees as a profit. The temporary worker is not even allowed to cancel, as he is then threatened with sanctions from the job centre.
The dreams of the charities are now coming true, too, many of their long-standing “program staff” can continue to perform their services without a large share of their own.