European Social Engineering in Action: Strange German 'One Euro Job' Slave-Labor/Welfare Scheme Implemented by Schroeder

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Germany Offers Unemployed Workers Jobs at $1.99/hour

Reuters ^ | 12/04/04 | Philip Blenkinsop

Posted on 12/04/2004 11:54:19 AM PST by Pikamax

Germany Offers Unemployed Workers Jobs at $1.99/hour Sat Dec 4, 2004 10:20 AM ET

By Philip Blenkinsop BERLIN (Reuters) - After 10 months of unsuccessful job applications, Christian Noelte accepted a position paying 1.50 euros ($1.99) an hour.

Noelte is one of the first volunteers for a controversial German work promotion scheme paying far below a living wage. The government hopes it will drive the long-term unemployed back to work or at least make them more employable.

Critics say the posts will exacerbate, rather than alleviate, the problems of Germany's labor market, potentially destroying existing positions and cutting the incentive to work.

The jobs are not as bad as they seem. Those earning the meager monthly salaries of up to 180 euros ($239) retain their jobless benefits. Noelte, 25, was one of about 300 people who applied for 70 low-paying jobs in the Berlin suburb of Spandau.

The positions also offer the promise of something better. Noelte worked previously as a gas and water system installer but now has a nine-month stint at a nursing home -- a change he hopes will prove to future employers that he is keen to work.

"For me it's an opportunity to make myself more attractive to an employer and to show that I have drive," he said.

Part of Chancellor Gerhard Schroeder's controversial labor market reforms, the scheme starts officially in January.

An extensive pilot program aims to employ around 50,000 long-term unemployed by the end of this year. There had been talk of 600,000 such posts by the end of 2005, but that target has been cut to about 350,000.

Thousands of Germans have taken to the streets to protest the labor market reforms, which include benefit cuts for the long-term unemployed and increased pressure on them to take up jobs even if they are overqualified.

The new scheme's posts were instantly dubbed "one euro jobs" by Germany's media, although the Federal Labor Office prefers "top-up job." The official title is "extra expense allowance" or MAE for short.

RISKS

Critics fear these jobs will destroy real economy jobs, as employers take on staff at the taxpayer's expense for a fraction of the cost.

The Labor Office says it recognizes this risk -- it recently dismissed one city council's proposal to employ some "one-euro workers" as language assistants in schools.

Noelte, who does some cleaning and serves food at the nursing home, has not replaced the cleaners and kitchen staff.

The jobs are also supposed to serve the community at large, rather than benefit private concerns. An idea to deploy unemployed people on buses and trams in a bid to curb vandalism met with a skeptical response since the operators stood to gain financially from reduced clean-up costs.

Cultural institutions have certainly taken on one-euro workers, filling some gaps left by local council budget cuts.

Vassilios Sevastianidis, 32, took up one such position in mid-October. A Greek man, who goes by the name of "Lucky," he produces flyers and has built a Web site for a puppet museum in southern Berlin.

Sevastianidis previously worked for the museum under a separate "ABM" work creation scheme. He says he has found his dream job but wonders whether he and other one-euro workers will ever find permanent employment.

"It doesn't seem to have happened with the ABMs. Why will it work with the MAEs?" he said.

Protesters say the scheme will produce no new jobs and could fuel the perception that the unemployed are idle layabouts who need to be driven into employment.

Herbert Buscher, labor market expert at the Halle-based IWH economic institute also has his doubts, saying the tax-free money offered means unemployed people could take home more than those on low-paid taxed jobs in the real economy.

In other words, the one-euro jobs may discourage people from seeking real work. A 12-month limit for the jobs is supposed to curb any such tendency.

However, Buscher argues that a one-year posting will provide little worthwhile training and do almost nothing to reduce Germany's shortage of skilled labor. The engineering sector, for example, has said it could hire thousands more qualified workers but cannot find them.

"I think the period is not sufficient... But working is better than being unemployed and will surely help with self-esteem and motivation," Buscher said.

Noelte agrees.

"I'm certainly still unemployed, but I feel calmer, more at ease," he said. "You get a chance with this scheme." ($1=.7535 Euro)