The proposal to eliminate Germany’s “Minijobs” part-time positions with a tax and social security threshold, is facing scrutiny from leading economic voices, who warn of minimal societal benefit and potential negative repercussions for low-income workers. Michael Hüther, Director of the Institute for Economic Research (IW), has cautioned that the move, championed by labor groups within the governing coalition, risks primarily burdening vulnerable individuals without achieving its intended goals.
Hüther’s assessment, published in the Rheinische Post, directly challenges the narrative pushed by the union-backed Verdi and affiliated labor organizations clamoring for the Minijobs system’s abolishment. He argues that the perceived advantages are highly questionable, while the increased bureaucratic overhead and tax burden on workers would be substantial.
The IW’s analysis suggests the policy’s impact on overall labor participation is likely to be negligible. According to Hüther, roughly one in seven employed individuals currently work only limited hours, often due to personal circumstances or declining health – factors largely beyond the influence of government intervention. Effectively forcing these individuals into full social security contributions, he states, would significantly reduce their net income, diminishing the attractiveness of these already part-time roles.
Furthermore, Hüther highlights a critical social security concern: workers engaged in Minijobs, due to the limited hours, accrue minimal rights or entitlements that would genuinely assist them during retirement or in the event of unemployment. The policy, therefore, creates a situation where individuals are compelled to contribute to social security systems with little tangible return.
The debate raises broader questions about the government’s approach to labor market policy and whether dismantling existing social safety nets, even partially, without adequately addressing the underlying issues driving low labor force participation, is a viable strategy. Critics suggest the focus should instead be on targeted initiatives that incentivize work and support individuals facing barriers to full employment, rather than imposing a blanket tax increase on already precarious livelihoods.
