Why minijobs are a failure and why they should be abolished

They had explained to us that German minijobs were a good solution and that they also had to be imported into Italy. But with the arrival of the crisis, minijobs showed themselves for what they are: a form of wage dumping, not too different from the legalization of illegal work. David Gutensohn writes about it on Zeit.de

Before the crisis, more than seven million people in Germany had a minijob, a so-called "marginal job". Marginal (Geringfügig) for Duden is synonymous with insignificant, irrelevant or small. And just the irrelevant jobs, apparently were among the first to be affected by the Coronavirus crisis. In fact, only in March 224,000 minijobs were fired. The six-week notice period, which also applies to minijobs, has in many cases been ignored. The minijob-Zentrale speaks of a "significant decline" and in a few weeks it also foresees a second wave of layoffs. Minijobs are not crisis proof. The time has come to get rid of it.

Who has a monijob earns up to 450 euros per month without having to pay the above taxes. There are no costs for health insurance, for invalidity or unemployment insurance. And the payment of pension contributions is only on a voluntary basis. There is a decisive advantage for employees: gross wages often correspond to net earnings. Originally the minijobs - substantially reformed by the Schröder government in 2003 - were designed to contain undeclared work in families and private homes, for example for cleaning or private lessons.

4.4 million people depend on minijobs

Today, however, most minijobs in Germany do not work in private homes, but in hotels, factories and healthcare. For many of them, the 450 euro a month job is by no means a small extra income that they can easily do without. 4.4 million Germans, in fact, depend exclusively on the revenues of minijobs, and have no other job besides this. These include many students, single parents and retirees.

During the crisis, however, the great advantage of minijobs turned into a disadvantage: because minijobs do not pay any social contributions, they are not entitled to social benefits, neither to unemployment benefits, nor to unemployment benefits. If they lose their jobs, as is happening to hundreds of thousands of people, they have only basic security (Hartz IV). And the current crisis also shows that for employers in the end the minijob is not profitable: it is no coincidence that these workers were the first to be dumped. Contrary to popular belief, the minijob for employers is by no means cheaper than normal employment relationships. For a normal employee, in fact, the employer has to pay about 20% in terms of taxes and duties, for minijobs more than 30% in the form of a flat-rate tax. And this even if the minijobber is not entitled to the benefits provided by social insurance.

Full-time positions have been replaced with minijobs

At the same time, a number of employers have been able to exploit this construct. Companies seeking flexibility replaced their full-time positions with more minijobs, says social science researcher Stefan Sell of Hochschule Koblenz. The Institut für Arbeitsmarkt- und Berufsforschung also states that many minijobs eventually only served to replace full-time employees. For this reason, minijobs have long since become the target of much criticism. Instead of creating safer jobs, there are more and more underpaid minijobs. Instead of a full-time cashier, they put three mini-jobsber in many workplaces. Instead of hiring waiters correctly, restaurants prefer to hire three non-union students, who don't found a Betriebsrat and don't ask for wage increases.

In times of crisis, employers use this flexibility to reduce staff more quickly. And this is an existential threat, especially for those people for whom the mini-job isn't just a small extra income.

There are no wage increases

And minijobs also have another disadvantage: if wages rise in some sector, minijobs must still remain below 450 euros per month. This can only be done by reducing working hours. For this reason, for example, a number of cleaning companies earlier this year asked for minijobs to be abolished. Since January 1, wages for cleaning staff have risen. But since no one can earn more than 450 euros with a minijob, over 100,000 cleaners have had to cut working hours. If it had only been their salary that would have increased, they would have exceeded 450 euros and would have been subject to social security contributions. But due to taxes and duties there would be almost nothing left of that wage increase. Also for this reason, many employees in the catering sector, after increasing the minimum wage, had to reduce working hours.

The bottom line is that minjobs can be used to avoid wage increases. They replace regular jobs and in times of crisis represent a burden on employers. The time has come to give up on this working model. Experts such as Enzo Weber of the Institut für Arbeitsmarkt- und Berufsforschung and the Greens, for example, suggest replacing minijobs with jobs subject to social security contributions. And this is also the only right way.

Work should prevent poverty in old age

In order for people to have greater risk protection in the future, workers need to pay funds into social security funds so that they are entitled to future benefits. Jobs are needed to prevent poverty in old age, because with these jobs it will be possible to fill the social security funds. And there is also a need for another way of earning a second additional income, which is also tax-free and therefore attractive to retirees, students and single parents.

To make this possible, every hour worked must be covered by social insurance. At the same time, the state will have to subsidize those who make little money by giving up taxing these people, as it does for example for so-called midijobs. From 2019, in fact, it is possible to earn between 450 and 1,300 euros gross per month, with a low taxation and with few social contributions, which, however, grow as salaries increase. Contrary to mini-jobs, these jobs are crisis-proof: companies can apply for layoffs instead of laying off workers. In the end, everyone benefits.