Does work still pay in Germany?

Olaf Scholz' major social reform, Bürgergeld, increases unemployment payments while dropping the penalties on people who don't find work. Some say it rewards laziness.

Photo by Adrian Swancar on Unsplash

Dear Reader,

Some political debates are as old as politics itself. Such as the one about whether giving alms to the poor makes them lazy.

Last year, Olaf Scholz’ government introduced a new welfare reform to replace the stringent old Hartz IV system. Given the friendly sounding name Bürgergeld (Citizen’s Money), the new dole system relaxed the penalties imposed for not finding a job while payments also shot up by 12 percent. Nobly, the government pledged that the new system would train people up to get good jobs instead of hounding them into low-paid work.

This January, Bürgergeld will increase by another 12 percent, bringing the base monthly payment to €563. That might not sound like a lot, but the state also pays your rent and heating bills if you’re unemployed. In total, monthly payments for a single person quickly accumulate to around €1,200 - that’s not far off the post-tax minimum wage of €1,400.

The issue is complicated somewhat by the fact that l…