German jobless face cut in welfare

[seriousstan]

Germany's sweeping welfare reforms have gone into effect as labour offices cut payments for a million jobless and qualifying tests got tougher.


Threatened mass protests to oppose the most far-reaching welfare reforms in a generation failed to materialise on Monday - the first day of the new, lower payments.

About 300 protesters tried to enter the main jobs centre in central Berlin but police blocked their path.

"The turnout is a bit disappointing but when people start realising the impact of this then they will come out," unemployed protester 50-year-old Detlef Stuye said.

http://english.aljazeera.net/NR/exeres/D008FEB6-1EC2-44BE-B72C-36DC0940C522.htm

[seriousstan]

1. Protesters Clash With Police as German Cutbacks in Jobless Pay Take Effect

BERLIN (AP) - Several hundred protesters clashed with police at a Berlin unemployment office Monday as a sharp cutback in jobless benefits took effect in a government effort to push people to find work.
Police in riot helmets used pepper spray as they blocked protesters from entering the office in Wedding, a working-class neighborhood with high unemployment, and made several arrests.

Scattered protests in Nuremberg, Munich, Leipzig and Stuttgart drew only a few dozen people each and didn't match the mass marches of tens of thousands in August and September against Chancellor Gerhard Schroeder's labor market reforms.

The new law, dubbed Hartz IV after Volkswagen executive Peter Hartz who headed the commission that drew up the reforms, is part of Schroeder's attempt to shake up the country's generous welfare state benefit system and spur more economic growth.

http://ap.tbo.com/ap/breaking/MGBJ7NNPI3E.html

[bobbieinok]

2. Germany 2004: The Road to Reform

http://www.dw-world.de/dw/article/0,1564,1443448,00.html

....

The core of the reform includes substantial cuts to benefits provided to the long-term unemployed. In theory, lower payouts from the government will encourage the jobless to accept work that is offered to them, even if it is low paid.

The government wants to put a dent in Germany's stubborn -- and growing -- unemployment rate, which is now at nearly 4.5 million. More than 10 percent of the population are registered as out of work. In some areas in eastern Germany, that number is almost double.

Angry populace

But the reform plans have triggered anger among many Germans, particularly those in the former East Germany, who complain that jobs are simply not available in a region which is structurally weak and has yet to catch up with the more affluent west.



Already incensed by cuts in health benefits that took effect at the beginning of 2004 and freezes in pension levels, tens of thousands of bitter Germans took to the streets during August and September in so-called "Monday demonstrations." They were modeled on similar protests in the east in 1989 that led to the collapse of the East German government.

They complained that the government was dismantling the cherished German welfare state and would end up driving many into poverty. The Social Democratic-Green government coalition watched as its approval ratings fell to all-time lows during the protests.

more....

many articles here about various aspects of the reforms....also some articles discussing similar reforms in other European countries

[Ravenseye]

3. The German System Needs Reform

I mean, I'm all for making sure that people don't starve to death just because they can't find a job...From my understanding you can pretty much do nothing in Germany, not even try to find a job, just smoke weed in the park all day and juggle and read, while the government pays you something like 500 Euros a month, while also providing a free apartment. That seems kind of excessive.

[eg101]

4. so you bought into the corporatist propaganda, huh?

BTW, I think it is a good deal for people to sit around in the park for extended periods of time, just so long as they don't it all their lives. But why not take some of the rich people's money to pay to working people to have them sit in the park a couple of years?

[Bono71]

6. "Corporatist Propoganda" good one...do you really think

a government (Schroeder) would risk losing his power and throwing the country into upheaval because some evil corporations want him to?

Please...

Have you been to Germany? The country has an unemployment rate north of 10%...the worst the US got during Bush was 6.5%...

If we had a 10% unemployment rate, there would be riots in the streets,

[lakeguy]

12. We do have an unemployment rate near 10%

"Have you been to Germany? The country has an unemployment rate north of 10%...the worst the US got during Bush was 6.5%..."

We do have an unemployment rate near 10%...if you include the under-employed, those no longer receiving benefits and those no longer looking for work. Where are the riots?

[Bono71]

13. No...we are nowhere close to Germany's unemployment

rate...there are parts of East Germany that are around 18-22% (as reported by the Financial Times in Spetember of 04).

I am interested in your statement that this country's rate is close 10%...I have never heard this...can you provide some data?

[Kellanved]

14. actually the US has about the same rate

Counting people in prison and using European measurements. Nonetheless your argument is sound.

[Barkley]

22. Eurosclerosis?

That's what some writers describe Europe's high unemployment.
They blame gov't regulation, welfare state and inefficient labor markets.

What is the unemployment rate in East Germany?

I'm don't buy the Euroscerlosis explanation for unemployment.

"Careful studies have shown that European benefits if anything, have become less generous during the period that unemployment rate increased." (Ref: Macroeconomics by Gordon 2003, p.301)

Before the unification (West) Germany had a low unemployment rate (5.6% in 1989) and high benefits.

Europe experienced a relatively stable inflation rate of between 3 and 5 percent existed in Europe in the 1960s. This was accompanied by an unemployment rate of about 2 percent.

And regulations since then have decreased and there's privatization of state owned industries across Europe.

The European inflation rate was about 4 percent in 1989, but the unemployment rate was about 7.5% percent.

Europe's problem looks to be insufficient demand. The rules of the EU limit how debt much countries can have, so there's a limit of Keynesian spending to boost demand.

I believe Germany has exceeded its debt limit.

[geek tragedy]

25. US jobless numbers include those who have lost their benefits.

And you think that there is no underemployment in Germany? Puh-leaze.

[Ravenseye]

7. Seriously?

Look. I believe in progressive taxation to help provide for the hardships of life but come on.

If you live in Germany and you're physically disabled, you can live a decent life, and not have to worry. If you want to work, and make more money than the government provides, you can. If it's too hard, you don't have to. Good.

If you lost your job and you spend a couple years looking for a new one, because jobs in your field are hard to come by, the government doesn't let you slip into poverty. Good.

If you just don't want to work, and want to sit around all day doing nothing for extended periods of time, for whatever reason...no...I don't think the government should support you, and rich people shouldn't support you either.

You shouldn't be worried about how you're going to pay for food or health care if you lose your job, heck in this country people who work 80 hours a week worry about those things. I just will never support taxing ANYONE just so someone can sit on their ass. That's all the german government is really doing now. Saying to people that their coverage won't last forever. There are people there who haven't worked in 5, 10, 20 years...and don't plan on getting a job. I'll never support giving people money when they have no desire to do anything.

I'll worry about the people who work their ass off and still have problems, not the ones who don't want to particpate in their own society.

[eg101]

15. our slave culture gave birth to your attitude

only in a nation born of a massive slave/indentured servant culture could saying what you just said bring applause. And most Americans would applaud what you said. But I would not.

[Bono71]

16. WHAT?!

What did he write sounds like "slave culture" to you?

Are you kidding me?

You would want to tax rich (and by the way, middle class people, too) so that people could sit on their arses? Seriously?

Slave culture? Sheesh.

[eg101]

20. homo strawmanus maximus

I wrote:
"BTW, I think it is a good deal for people to sit around in the park for extended periods of time, just so long as they don't it all their lives. But why not take some of the rich people's money to pay to working people to have them sit in the park a couple of years?"

And in response you wrote:

You would want to tax rich (and by the way, middle class people, too) so that people could sit on their arses? Seriously?

No, you twisted my words. I said "rich" and you said "rich...and middle class". Down in Texas we call that "twisting someone's words."

Yes, I think taxation should be compartmentalized. Taxes collected from middle class working people should go to things like military spending and roads and infrastructure. Taxes from corporations and from people who make over $200K or so, or those who have wealth of over $1M or so, ought to go towards social spending, like longterm unemployment, welfare payments, paying for education, unversal healthcare and other social spending.

[Bono71]

21. Slave culture...

what on God's green earth would make you write something like that?

Moreover, forget the middle class...you would want to tax rich people so people could just sit on their arses? Where do I sign up for that program, I'm sick of working.

[Ravenseye]

19. Absurd.

That doesn't even make sense.

It's slave culture that makes me say that I'm not interested in paying one penny to someone so they don't have to work and have a nice comfortable life?

Why don't we all just sit around and do nothing. What would happen then? Who would pay for everyone to sit around and do nothing. The world would collapse and everyone would starve to death within weeks.

So if it's selectively done by a few people who in certain situations can get away with it thats fine, eh? What right do those people have to not work, while I have to in order to support them.

Bullshit.

[geek tragedy]

26. What an idiotic comment.

Requiring that able-bodied people work = refusing to force the hardworking to support the lazy.

It would be slavery to force wage earners to support people who just don't want to work.

Don't get me wrong--I support a social welfare system that protects those who are vulnerable. But laziness is not a human right.

[eg101]

28. what about landlords who inherit property are sit around drunk?

We Americans and our ancestors built America. We own it. If it could support us citizens without our having to work, then that is a good thing.

[Bono71]

29. Good lord what are you talking about...

news flash: if no one worked, there would be nothing to support anyone...

Your comment about landlords is totally absurd.

[Kellanved]

17. propaganda?

Ahem: For starters the reforms are by no means as drastic as many make them sound. Yes, the conservative majority in the upper house made some idiotic additions, but anyway - those cuts should (and would) have been done by Schmidt; waiting 20 years was idiocy.

As for the taxation of the rich: the rich are far more heavily taxed in Germany than about anywhere else (the average tax isn't that high, certainly no superlative). Raising the tax any further will just result in more people moving to Switzerland.

The main problem of the Social Net is the Reunification: 16 million people joined, who never had even paid one cent into the social insurance. Now about 20% of those are unemployed or retired. Do the math.

[blackhorse]

24. I think

... you hit one of the main causes of the current crisis -- Kohl's engineering of reunification as the opportunity presented itself. Understandable from a national point of view, but the economic cost may last a long time.

There is also a stong psychological subtext present. For decades, the Federal Republic presented itself to its citizens as an example of successful, progressive socialism. Now, the government has done an about-face and now says they can't afford the social net that everyone had before. Won't go over well in the long run -- sort of a case of expectations being raised very high and then allowed to come crashing down.

One thing I find particularly obnoxious is the threat of large employers to go over the border into countries with less expensive labor -- this being used as a tactic to squeeze concessions from the labor unions. Seems to me if Schroeder's government were really a socialist one, he would have have had some very frank discussions with these heads of these firms. Schroeder gives the appearance of standing by with no new ideas while the capitalists tremendously increase their power over the laborers -- again, something that is at odds with the BRD tradition of labor unions with some real influence.

My wife sees it at her workplace -- the workers are getting less and management is getting more. One has the impression that there is a lot more going on here than mere tightening of the belt -- there is also genuine class warfare being waged.

" <disgusted> Na, ja ..."

Cheers

BH

[lebkuchen]

5. Where did you hear this?

Germany is full of laws and regulations that appear to be adhered to (I just got a speeding ticket from one of those secret cameras hidden in a trashcan--going 3 km over the speedlimit).

I live in Bavaria and so don't notice the unemployment rolls much, and certainly don't see vagrants sitting on park benches shooting up.

Germany has some amazing social programs, the kindergeld being one in which the govt. pays a certain amount a month (it used to be 150 DM) for every child until adulthood. My cousin, a doctor, was getting 500 DM per month for his kids, and he knew he wouldn't be paying for their college educations, either.

Germans are concerned about the rise in costs to prescription medicines in particular. They are very nervous about their system becoming "more like America's."

At least Germany is making an attempt to balance the books. The US just raised its own debt ceiling, again.

[Ravenseye]

8. Friends outside Bremen

Visited there this past spring.

I'm not trying to imply that everyone on the doll in Germany is sitting on park benches with their pot vaporizers and heroin needles. The people I have met that are on the doll, I met a few, tended to actually be pretty active. Biking, touring, playing sports, etc. Nice young people who just didn't feel like getting that permanent job and settling down yet.

If Germany wants to do something, then it's not my place to complain about it. Personally I love visiting Germany, Belgium, Holland, etc. They are clean, and seem far more modern, than anywhere I've been in the states, which is funny. You'd think Europe would seem older, but it really doesn't to me. The public spaces and parks are better, nicely maintained, etc.

I just don't see how anyone can justify taxing people to pay for people who have no intention of ever contributing in any way to their country or society, or world. We're not talking about people who can't get jobs, we're talking about people who don't want jobs.

[Bridget Burke]

9. Do you have any hard data?

Exactly how many people are unemployed? Why are they unemployed?

One visit & the opinions of "some friends outside Bremen" aren't really enough to get a good picture.

[Ravenseye]

11. Yes

http://www.dw-world.de/dw/article/0,1564,1252628,00.html

"The reforms affect about 1.6 million Germans who have been unemployed for more than a year as well as about 1 million people who are currently receiving social welfare payments because they cannot work."

"Until now, long-term unemployed have received a larger sum of money and had to pay for their own housing. Now, single people will receive only about €345 ($420) per month while municipalities will take over paying rent."

Long-Term Unemployment Among Young People: The Risk of Social Exclusion
http://www.ipg.uni-bremen.de/staff/kieselbach/AJCP.03.pdf

Long-Term Unemployment Among Young People in Europe
http://www.nuff.ox.ac.uk/projects/UWWCLUS/papers/restrict/Kieselbach.pdf

The Causes and Consequences of Long Term Unemployment
http://cep.lse.ac.uk/pubs/download/dp0400.pdf

There are plenty of more studies and papers with numbers and whatnot. Most people who are long term unemployed aren't that way because of choice, and I never said they were. There aren't a million German slackers sitting around.

My response was dictated by my personal conversations with people who were LTU by choice, and that I dont' think it's right to tax anyone to pay for someone who chooses not to work. There are plenty of people who are LTU who WANT to work. Why should they struggle then get a job and pay part of their taxes to support someone who chooses not to work?

*edit* I forgot to mention that I lived there for a year as well when I was a student myself in 1990. Not just one little visit. *edit*

[Kellanved]

18. 3 KM/h?

You can probably get rid of it: usually they have to give you 10% grace. Also the fine should be relatively harmless.

[lebkuchen]

23. I already paid it, a year ago

I think it was 15 euro, something like that.

I've been told, by a German neighbor, who used to work as an investment banker in the US, that German judges are very strict. If you go to court to contest, they tend to see things in black and white.

I used to always contest in San Francisco, and with a fairly reasonable excuse, could usually get the fine dismissed. In Germany, I wouldn't bother trying, based on what Germans themselves tell me.

[Yavin4]

10. Explain This To Me

We have the same, or may be worse, debt problems that Germany has, but we don't have nearly the same social safety net. You 13 weeks UE, and then you're on your own.

So, if gutting social spending means getting your nation out of debt, then why aren't we running a surplus?

[geek tragedy]

27. We invaded Iraq and elected W as Preznit. eom