The
Hartz concept is a set of recommendations that
resulted from a commission on reforms to the
German labour market in 2002. Named after the head of the
commission,
Peter Hartz, it went on to become part of the
German government's
Agenda 2010 series of reforms, known as Hartz I - Hartz IV.
The reforms of Hartz I - III took place between January 1, 2003,
and 2004; Hartz IV began on January 1, 2005.
The "Hartz
Committee" was founded on February 22, 2002, by the federal
government led then by
Gerhard Schröder; its real name was Kommission für
moderne Dienstleistungen am Arbeitsmarkt – the Committee for
Modern Services in the Labour Market. Its 15 members were led by
Peter Hartz, then
Volkswagen's personnel director.
The committee devised thirteen "innovation modules", which
suggested changes to the German labour market system. These were
then put into practice as Hartz I - IV:
Hartz
I, II and III
Hartz I and II both came into effect on January 1, 2003,
aiming at making new types of jobs easier to create, and
covered, for example:
(Hartz I)
- The foundation of "Staff Services agencies" (Personal-Service-Agenturen
or PSAs).
- Support for vocational further education from the German
Federal Labour Agency.
- Subsistence payments by the Federal Labour Agency.
(Hartz II)
- New types of employment, "Minijob" and "Midijob", with
lower or gradually rising taxes and insurance payments.
- A grant for entrepreneurs, known as the "Ich-AG" (Me,
Inc.).
- A rise in the number of job centres.
(Hartz III)
- Hartz III came into effect on January 1, 2004. This
measure was aimed at restructuring and reforming
Job Centres, whose name was changed from the
Bundesanstalt für Arbeit or
Arbeitsamt (Federal Labour Institution), to the
Bundesagentur für Arbeit or
Agentur für Arbeit (Federal Labour Agency).
Hartz IV
The Hartz IV reform was voted in by the
Bundestag on December 16, 2003 and by the
Bundesrat on July 9, 2004; taking effect by January 1,
2005. This part of the reform brought together the former
unemployment benefits for long term unemployed
('Arbeitslosenhilfe') and the welfare benefits ('Sozialhilfe'),
leaving them both at approximately the lower level of the former
'Sozialhilfe'. The level for a single person was
€374
per month for a single person (known as the Regelsatz).
This was raised to
€382
per month in 2013.[1])
Added to this is financial assistance with housing and health
care. Couples can receive benefits for each partner including
their children.
Prior to 2005, between 12 and 36 months (depending upon the
claimant's age and work history) of their full unemployment
benefit (60 to 67% of the previous net salary) were followed by
Arbeitslosenhilfe (unemployment assistance, 53 to 57% of
the last net salary). Since 2008, eligibility for the full
unemployment benefit (renamed Arbeitslosengeld in 2005
and commonly referred to as Arbeitslosengeld I in
everyday German to contrast it with the lower benefits discussed
below), has been restricted to 12 months in general, 15 months
for those aged 50 or older, 18 months for those 55 or older and
24 months for those 58 or older. This is now followed by
(usually much lower) Arbeitslosengeld II (Hartz IV)
benefits if the claimant meets eligibility requirements.
Whether or not a claimant is eligible for Arbeitslosengeld
II depends on his or her savings, life insurance and the
income of spouse or partner. If these assets are below a
threshold level, a claimant can get money from the state. The
threshold level in July 2008 was €150 for free assets (at least
€3,100) and €250 for fixed retirement assets, both calculated
per capita and lifetime year.[2]
Additionally, every employable individual in a communal
household (persons living in and depending on the resources of
the claimant), can have one car worth about €7,500 and a
self-used house of 130 square meters living space (more if there
are other people in the common household).
To receive payments, a claimant must agree to a contract
subject to
public law. This contract outlines what they are obliged to
do to improve their job situation, and when the state is obliged
to help. An unemployed person may be required to accept any kind
of legal job. This compulsion is restricted by constitutional
rights, like freedom of movement, freedom of family, marriage
and
human dignity. If taking on a specific placement is deemed
reasonable by the responsible agency, not applying will result
in a reduction or even complete suspension of the appropriate
payment.
Within the Arbeitslosengeld II schemes, the state
covers the health insurance of the unemployed. Until the end of
2010, payments towards the pension scheme of the claimant were
also made.
It is possible to earn income from a job and receive
Arbeitslosengeld II benefits at the same time. Job income is
debited from Arbeitslosengeld II payments according to a
formula that leaves a certain amount of the additional revenue
untouched. These revenues are: a certain amount of savings
(which increases with age); €100 plus 20 percent of the wage up
to €800 plus 10% of the wage up to €1200 (up to €1500 if there
are children). Through this mechanism Arbeitslosengeld II
can be regarded as a sort of
minimum wage floor for employees without assets, where the
minimum wage is not fully paid by the employer but assured by
the state. There are criticisms that this defies competition and
leads to a downward spiral in wages and the loss of full-time
jobs.
The Hartz IV reform merged the federal level unemployment
agency with the local level welfare administration. This
facilitated a better, case-oriented approach to helping
unemployed people find work and improve their situations. The
plan's objective is to reduce caseloads from 400 unemployed
persons per agent to not more than 75 (aged 25 or less), or not
more than 150 persons over the age of 25. For difficult cases,
dedicated case managers may be deployed. Legally, however, the
agencies remain separate.
The Hartz IV reforms continue to attract criticism in
Germany, despite a considerable reduction in short and long term
unemployment. This reduction has led to some claims of success
for the Hartz reforms. Others say the actual unemployment
figures are not comparable because many people work part-time or
are not included in the statistics for other reasons, such as
the number of children that live in Hartz IV households, which
has risen to record numbers.
In popular
culture
Although the official term for long-term unemployment
benefits is still Arbeitslosengeld II, most Germans, even
news programmes and politicians in parliament, refer to it as
Hartz IV. The term was voted
German Word of the Year 2004 by the
Society for the German Language.[3]
Earlier, in 2002, the term Ich-AG (another Hartz measure,
see above) had been chosen as the
German Un-Word of the Year by a jury of linguistic scholars.
Meanwhile, Hartz IV has become a synonym for the class
of non-working poor and is used as a prefix in multiple contexts
(i.e. low-brow daytime television programmes are called "Hartz
IV TV" by critics).
See also
References
External links