Sunday, January 31, 2016

Germany: money for jobless goes to pay for jobcenter administration

Germany's official unemployment figures look good. They went from around 5 million ten years ago to around 3 million in 2015.

Yet, the agency administering benefits continues to have a headcount of over 100 000, with a budget of around 50 billion dollars. By size, this would put the agency in the number 12 spot compared to Germany's 30 biggest companies, beating household names like Bayer and Lufthansa.

Critics, and there are many, have called the agency a model of job enrichment.

Investigative journalist and German media bad boy Wallraff did some of his trademark undercover work in and around the agency's local branches (called Jobcenter in easy modern German) and reports desolation and desperation, both on the part of the job center employees and their "customers". In bureaucratic newspeak, Germany has adopted the term "Kunde" (customer) for its unemployed and those in need of government benefits.

Wallraff quotes former jobcenter workers:
In the end, it is an institution so busy with itself that we don't need any customers.
It's a money destruction machine with a desolate structure.
We only administer unemployment.

Taking care of regular unemployment benefits is one of the main functions of the agency. If you have worked long enough and are laid off, they will pay the benefits.
But - as we described in a previous post - you must be prepared to be called Arrogant and Lazy when you show up with all documentation and a temporary job offer

A second major area is administering the basic means tested benefits regime Hartz-IV (named after its inventor, who was convicted of corruption a couple of years after his brainchild became Germany's new normal for the poor).
Related to this is the effort to get the country's long-term unemployed back into work.
Hartz-IV regulations come with German style, painstakingly detailed, means testing: a cheap car is okay, a small house, too. But if you exceed the allowed square meters for your posh residence (50 sqm/adult), the agency can make you move into a smaller domicile, with the cost of the move on you.
Sanctions for missing appointments at the jobcenter, for not filing enough applications, and for pretty much anything that can be construed as unwillingness to work, are a big part of "re-integrating" customers into the general labor market.

In 2015, the Bundesagentur came under fire for plans to take 750 million Euros out of the general Hartz-IV budget, thus cutting benefits for 4.3 million Germans, and use them to fund a special program for 43 000 long term unemployed.

This means, just under 17 500 Euros per head for an effort to put these long term unemployed to work.

Worse, on January 30, 2016, the German minister of labor, who oversees the jobs agency was accused of taking funds earmarked for measures to get jobless back into work to pay for jobcenter administration costs.

The total moved from benefits to administration in 2015 comes to 767 million Euros out of a budget of about 4 billion in integration funds. This is legal, so why the upset?

Because it allows the government to show how great of an effort its makes in support of the unemployed and of HARTZ-IV claimants at the beginning of the year, only to then go and take hundreds of millions of those funds and move them into the general administration budget.

This report comes just days before a law designed to "streamline" the benefits system to be able to better handle the additional workload due to the influx of refugees is going before parliament.

Charities already criticize the new regulations as insufficient and not addressing administrative waste, citing, for example a government report stating that a small contribution of 10 Euros for a child's music lessons comes with 6 Euros of administrative costs. 

The sanctions system also remains in force, and just one failure to finish a "support measure" can entail a 3 months cash benefits suspension, with a second failure potentially leading to cancellation of rent assistance, exposing customers to homelessness.

No comments:

Post a Comment