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Do We Need a New Social System?

by Hannes Koch and Katharina Koufen Wednesday, May. 30, 2007 at 9:39 AM

Only half of all employees today (in Germany) enjoy the old standard job.. The erosion of normal working conditions has been underway since the middle of the 1970s.. The basic income is the answer to the precariousness of working conditions.


By Hannes Koch and Katherina Koufen

[This article published in: die tageszeitung, 4/30/2007 is translated from the German on the World Wide Web,]

There are people who know everything about how we work, everything that can be discovered scientifically. Ulrich Walwei is one of them. Twenty years ago he wrote his doctorate on time-limited employment. On May 1, 2007 he became head of the institute for Labor Market and Occupational Research in Nurnberg. In these 20 years, the work society in Germany has radically changed. Now the 48-year old Walwei is in a minority – with a firm unlimited job that pays into social security and feeds them well.

“Normal working conditions continue to lose significance,” says Ulrich Walwei, Germany’s top public labor market researcher. In the 1950s and 1960s, the golden age of the German economic miracle, nearly all employees worked at positions with an inherent promise: “You can feed your family, all your life from this work.” This has changed. Only half of all employees today enjoy the old standard job.

The daily risk of becoming a welfare case has increased considerably. That a political concept answers old questions in a new way is not a miracle. Katja Kipping, co-director of the Left party, drug store businessman Gotz Werner, environmental advocate Reinhard Loske (Greens) and the CDU prime minister of Thuringen, Dieter Althaus – to name only a few – stand up for a visionary idea, the unconditional basic income. 800 euro per person would be given every month by the state to every adult German citizen, Althaus proposes. Most past social benefits would fall away. The charm of the idea is that the basic income would be granted as citizen money to which everyone has a claim irrespective of readiness to work and the often degrading procedures of the Hartz IV system. Basic income is conceived as a new reliable existential security – since everyone cannot finance his livelihood with his paid work.

The times have changed. These changes were not reflected in the call of the unions on May 1, 2007, the traditional day of labor. The declaration of the German Union alliance (DGB) says: “Every person must be able to live in dignity from his income and not forced to second- and third jobs.” But isn’t this reality of second- and third jobs, poorly paid part-time positions with a gross hourly wage of 3.80 euro, the time-limited honorary activity, explained away? Is there a legitimate hope that modern flexible and sometimes rotten working conditions will make way for good old full-time jobs?

The erosion of normal working conditions has been underway since the middle of the 1970s. According to statistics published by Ulrich Walwei and the Institute for Labor Market and Occupational Research, 34.7 million out of Germany’s 82 million inhabitants were dependent employees in 2006 who signed work contracts with businesses. Of them, 11.5 million persons only work part-time. Another 3.5 million receive low wages from which they and their families often cannot live. All in all, 19.7 million employees still enjoy so-called standard working conditions. These are 56 percent of all dependent employees. The relation turns out even more dramatic when compared with potential paid workers, the number of those who would work if allowed, 44.5 million potential paid workers in Germany: 44 percent have a standard job. Thus the former majority model of the economic miracle has become a minority model today.

The reasons for this are obvious. One development that quickly gained speed after reunification was already felt in the last decade of the old Germany: globalization. Since the 1940s, western countries have worked on reducing tariffs and facilitating trade with capital. However the consequences first came into German living rooms in the 1980s. The stereo is no longer Grundig but Kenwood or Sony. German labor was always good and expensive but Asian labor was suddenly good and cheap.

After the fall of the Iron Curtain, German businesses blossomed over night in Vorgarten, a low-wage paradise. While East Germans urged a rapid adjustment of their wages to the western level, Poles, Czechs and Rumanians worked for a fraction of German salaries. After the founding of the World Trade Organization (WTO) in 1994, labor markets in the Far East increasingly offered their services – at a fraction of Polish or Czech wages.

From then on, the personnel in Germany were cut down to size with threats. If you don’t restrain yourselves, we will outsource your jobs. The unions must stand and watch as achievements gained over decades are dismissed as nothing. Their members work longer for less money and are always afraid of losing their job. The boom of part-time and contract work is an example of this development. A gap exists between employees’ traditionally great need of protection and businesses’ desires for a flexible “hire and fire.” Day- or week-jobs are offered; the pay is often below the wage scale.

Something has changed since the golden age of full employment ended. The traditional single breadwinner family has survived. Modern couples try to divide up bringing up children, housekeeping and gainful employment. At the same time, the up and coming generation must care for their aging relatives. The demand for part-time jobs increases.

The questions “Can normal working conditions be reconstructed? Does Germany need a new social system to prevent new life risks? Resound on this background. Michael Opielke urges introduction of an unconditional basic income. He is a professor of social policy in Jena and has analyzed the citizen money model of Thuringian’s Prime Minister Althaus. “We must uncouple existential security from the labor market,” Opielke says. His reason is: “Standard working conditions can not be restored.”

On the other hand, Dierk Hirschel doubts that a “structural breach” occurred between 1960 and 2007. He is chief economist of the German Union alliance that organized the May 1 demonstrations. “If we only have five years of upswing, no one would speak about the unconditional basic income,” Hirschel said, “because growth creates jobs.”

Most politicians act as though it is only a question of time until the epoch of Volkswagen returns. The current economic boom seems to prove them right. Unlike years before, optimism prevails among many economists. “The upswing must continue four years” said Gustav Horn, director of the union-friendly Institute for Macro-economics and Economic Research. Then the number of unemployed could fall to under two million persons and the unemployment rate would be four to five percent. “We can live with that,” Horn said.

Holger Schafer from the business-friendly Institute of the German Economy in Koln also regards a return to full employment as possible. “Other countries like Denmark and Great Britain attained that within ten years,” Schafer said. Nevertheless he is skeptical whether Germany will completely abolish unemployment. “The more people are hired, the more employees will have little training and thus lower productivity,” according to Schafer. Untrained persons usually only find a job on the first labor market. Thus full employment can only be reached with expansion of the low-wage sector. “Whether people want this is a political question,” Schafer said.

Union economist Dierk Hirschel concedes that many of the new jobs do not satisfy traditional demands: “More than 50 percent of the jobs that are now arising must be described as precarious.” He urges a “better economic policy” to prevent this. The union alliance would bring back the good old working conditions by law. The union alliance emphasizes abolishing poorly paid mini- and midi-jobs to better insure part-time employees. Ulrich Walwei from the Institute for Labor Market and Occupational Research in Nurnberg also thinks in this direction: “The erosion of normal working conditions is a trend. However international comparisons show that this development can be managed.”

On the other hand, basic income advocate Michael Opielka sees a central argument for his concept in the rise of rotten jobs. “The basic income is the answer to the precariousness of working conditions,” Opielka says. Work may not end for us. Still the new jobs created by the upswing are often of lesser quality than past jobs, the professor for social policy argues. Therefore people need a new kind of existential security and a new feeling of social security.

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