Germany liberalized its labor market in with Chancellor Schröder’s reform package “Agenda 2010.” 12 years later, there is an abundance of junk jobs and a shortage of “skilled” labor. The Americanization of the labor market is in full effect.
The number of people registered for unemployment benefits (“ALG II”) has decrease, but only because workers were bullied into accepting 1 euro jobs and endless “qualification” measures and “apprenticeships” (a.k.a. “junk jobs”).
Contrary to the logic of the neoliberal party (FDP) and the two mainstream parties, the Christian Democrats (CDU) and the Social Democrats (SPD), the reason for the shortage is not that there are no workers available; there are still some able-bodied individuals left in Germany. The reason is that wages are too low, and they are kept down by force. What politicians call “qualification” is nothing but the willingness to work for less.
Neoliberal economists explain shortages as price phenomena, usually caused by price fixing. People starve not because there is no food, but because the available food is too expensive. Even in poor capitalist states, starvation is not a problem of the rich.
There is also the opposite case for shortages: food prices are too low (due to official decrees, for example) and food sells out before everyone is fed, or government purchasers take food from under the farmers’ noses to export it.
Likewise, if there are not enough workers for a job, it is because wages are lower than the cost of living. This has less to do with the assumed prestige of a job than with the actual pay. If frying sausages paid more than pulling teeth, we’d soon have a shortage of dentists and a surplus of sausage vendors.
Employers would usually have to offer higher prices, but the German government introduces maximum wages instead of minimum wages, in a desperate attempt to reduce the “nationalized” working class to Manchester-style exploitation.
The unemployment benefits workers receive under the German “workfare” model are not a minimum income. In practice, they put a legal cap on the monthly income a person can earn. Welfare recipients must disclose all their income – if they work on the side, they not only risk losing their benefits, but may even be persecuted for “working black” (“Schwarzarbeit”). This follows the capitalist creed: “Accumulate wealth by all means but your own labor.”
Many “frozen” laborers work “illegally” for cash (often promised but not paid) and register for benefits to keep payments for rent and health insurance current. The work is usually day labor – cleaning, carrying, cooking – but rarely provides a regular income. In East Germany, there were laws against unemployment; in West Germany there are laws against employment.
When welfare recipients agree to take a one-euro job, they earn about 400 euro per month, slightly more than the welfare allowance. The wage for a job with payroll tax is essentially fixed, and it was fixed by a Social Democrat and Green coalition in collaboration with employers and employee representatives in the Hartz IV reforms.
However, instead of creating an abundance of cheap labor to allow Germany’s products to compete with those of other industrial nations, governmental price fixing for wages has achieved the exact opposite. There are simply too few people willing to sell their labor this cheap. If this course is followed, they will soon drive workers to the factories with batons.