The socially green conversion of the ALG2 apparatus

ALG II will soon be history. So it sounds full-bodied from the circles of the coalition negotiations of the traffic light parties. Instead, a so-called citizen's allowance should guarantee the basic security in the future. The old sanctions are still in place. What will change, however, according to the exploratory paper, are the additional income opportunities. Those who receive the basic security from the state should be allowed to earn more money in the future without having to fear high deductions. But this only sounds social at first glance. Instead, citizens' money threatens to become a new edition of the combined wage model, in which the state and thus the taxpayer subsidizes companies that pay low wages and steal from social security.

The low-wage sector in Germany has not fallen from the sky. Rather, it was the goal of the agenda policy of the red-green governing coalition under Gerhard Schröder. This well-known 2005 at the World Economic Forum in Davos full of pride: "We have liberalized our labor market. We have built one of the best low-wage sectors in Europe." And that is also true, whereby the attribute "the best" of course – as to be expected in Gerhard Schröder's case - does not refer to the employee perspective, but to the employer perspective. Because it is not so easy to establish a wage sector in a country with a relatively high cost of living, where the income from work is not enough to live.

One of the core elements of the framework conditions of this low-wage sector is the state subsidisation of low-paid activities. This subsidy works mainly through a "wage subsidy", which in the Hartz IV model represent the so-called increases. Simplified: If you do not get above the subsistence level at the end of the month despite your regular work, you can have your income increased by Hartz IV benefits. Thus, the community pays the difference between (low)wage and subsistence level - a sum that in a truly social market economy the employer would have to pay.

This has nothing to do with a functioning market. If the labor market also worked in the lower wage classes, the provider of labor would have the opportunity to reject a price that is too bad (here: wage). This is not possible in the Hartz system through the threat of sanctions. The worker is thus forced to accept what economists call the "wrong" price. And the general public ensures through the "increase" that he can at least at the very lowest level. From this perspective, this has little to do with solidarity. If the worker could no longer pay his rent or his food, he would become homeless or starve and would no longer be available to the low-wage sector. If he could no longer afford his car or the ticket for bus and train, he would no longer be able to get to work. From an economic perspective, the employer is therefore very interested in ensuring that its employees in the low-wage sector do not fall below the subsistence level. By the way, one should not confuse this economic perspective with cynicism. This is exactly how the neoliberal school of economics argues.

Another effect of agenda policy deregulation of the labor market has been (and still is) the escape from social security. Those who work only in a "minor" measure also do not pay social security contributions for health insurance, pensions or unemployment insurance. The employee then has more net of gross, as an old FDP election campaigner so nicely demanded, but the real beneficiary of this circumvention of the social systems is of course the employer, since he also does not have to pay contributions for the social systems. These are the infamous "non-wage costs", which were also once a campaign hit. This should also be considered from the employer's point of view in order to understand the real meaning behind it: if a supermarket employs a full-time seller at the minimum wage, the employer must pay the full social contributions for this worker. If he instead employs three or four part-time salespeople on a mini-job basis, he gets around these costs. The result for society: more and more people are being forced out of a "real" full-time social security job, in which the employer participates equally in the financing of the social system.

All in all, the Hartz laws combined with the possibilities for creating employment relationships not subject to social insurance are precisely the framework conditions under which, according to Gerhard Schröder, "Europe's best low-wage sector" could emerge. And the Community subsidises this through its taxes and through the social systems.

If these connections are clear to one, one will certainly evaluate the now debated "additional income opportunities" differently. In fact, these are not social feats, but rather an extension of subsidies for poorly paid activities outside the social systems. If, for example, a citizen's allowance recipient could earn 500 euros a month without deductions, this would be good news for employers.

Why should the supermarket operator then still hire full-time employees subject to social security contributions? It is much cheaper from a business point of view to employ citizens' money recipients on a 500-euro basis instead. Thanks to the citizens' money, they can pay their rent and not starve and 500 euros in addition to the hand – there are no taxes or social security contributions – are then enough for a life at a still low, but at least above today's Hartz IV level.

So is the citizen's money plus additional income opportunities ultimately not so bad for those affected? No! Because the alternative to Bürgergeld plus Zusverdienst in this case is not the basic security, but a regular job plus social security. After all, the work has to be done and if the supermarket operator is not able to avoid employment relationships subject to social security contributions through the deregulations offered, he does not close the supermarket down, but willy-nilly has to hire regular workers and pay social security contributions. This depresses the profit. However, for the recipient of the citizen's allowance, this means that without this instrument he would rather have a regular job subject to social security contributions and can also build up pension rights over time. A citizen's money with additional income opportunities blocks this path.

Ultimately, a citizen's allowance with additional income thus represents the classic combined wage model - a model in which the state subsidizes low-paid employment relationships via transfer payments. This is pure FDP. The SPD and the Greens are thus facing the second labor and social-political "fall from grace" in their history.