SPECIAL REPORT: Are minijobs a solution for Europe?

 

In December 2013, Germans worked 7.583.000 minijobs, according to the Agency of Labor data. A minijob is a low-paid contract with a maximum of 15 hours per week with a salary of 450 euros per month, and they’re very popular in Germany because the employee doesn’t need to pay taxes. Only the employer pays a lump sum of 30 percent to the Treasury and Social Security, while workers may voluntarily contribute an additional 4.5 percent of their income to supplement social security contributions and pension and sickness coverage.

This kind of contract has its origins in the reforms introduced by former Chancellor Gerhard Schröder in 2003, known as “Hartz reforms”. As a response to the high unemployment at the beginning of the past decade, the “sick man of Europe” launched a program of reforms, including a complete deregulation of the labor market. These reforms worked, at least according to the German unemployment rate, which dove from 11.3 percent in 2005 to just 5.3 percent in 2013.

 “The Minijobs-regulation helps to create a functioning low-wage-sector in Germany, which was highly necessary. But we should think twice before overestimating the effect of this little part of the Hartz-reforms on the success of the German economy in all. There were a lot of other reforms on the labor market, in the companies, in the educational system and so on,” said Eva Rindfleisch, Labor Market Policy coordinator from the Konrad-Adenauer Foundation, a think tank associated with the Christian Democratic Union Party (CDU).

She said marginal part-time jobs are attractive for firms that need to cover rush hours during the work day. Especially in low-pay sectors as retail trade or hotels and restaurants, minijobs can help to create additional jobs. The expert also defends minijobs as a “very unbureaucratic type of job” and a way to legalize workers that tend to be in the black market.

By contrast, Werner Eichhorst, director of Labor Policy Europe from the ‘Institute for the Study of Labor’ in Bonn, positions himself as opponent.

 “Minijobs create a segment of workers that are not integrated in the regular labor market,¨ he said. Minijobs are attractive but only if you’re very low qualified. For qualified workers, a minijob means work where they cannot be promoted and develop their abilities, so they stay blocked (from career advancement).”

Women make up three quarters of the minijobbers, and they rarely make the transition to a better-paid work, according to a study released by the Bertelsmann Foundation.

For Judith Chaler, a 23-year-old Spanish woman working in Berlin, minijobs can be a useful addition to other activities. 

“Such as studying German in my case or studying a formation course. For example, when I get a B2 level in German, I’d like to find a full time job or to study a formation course that allows me to have a stable job,” says the minijobber working in a catering service business.

Nevertheless, she noted that she couldn’t live in Berlin if she didn’t receive the help from the German state.

“Minijobs are typically German. No other country in Europe has a similar type of job regulation,” says the researcher from the Konrad-Adenauer Foundation.

However, with a Spanish unemployment rate of 26 percent and 55.1 percent for youth, the introduction of minijobs could be an option to get unemployed people into the labor market again. As far back as September 2011, the European Central Bank recommended that Spain consider applying the German model of minijobs. The Spanish employers’ organization CEOE have also petitioned Rajoy’s government several times to study the proposal.

The part-time jobs may not save Spain, though. Eichhorst rejects the implementation of this kind of contract in Spain.

“With the high unemployment rate of Spain, it should be more reasonable to help the people to go into the labour market with full time or part time jobs where they can be promoted in the long-term,” he said.

 

About the Author

Alberto Lozano
Alberto Lozano is The Corner correspondent in Berlin, from where he reports about the main German and European economic and political topics. He has been a contributor to various media such as RTVE, PressEurop, Esquire and Forbes. Alberto holds a degree in Journalism from the Complutense University in Madrid and the Free University of Brussels.

1 Comment on "SPECIAL REPORT: Are minijobs a solution for Europe?"

  1. Very good article! Thanks!

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