Can Hartz IV reform help the fight-back in the east?
2019 will be a crucial year for Germany’s SPD. Elections will be held in the east German states of Brandenburg, Saxony and Thuringia, as well as in the west German city state of Bremen.
The SPD’s lack of a clear identity and the loss of its traditional working class base (in many instances to the AfD or to the Greens) led to a historically low vote for the party in the 2017 federal election, especially in the east where the party won less than 14% of the vote. On her election as party leader in April last year, Andrea Nahles promised renewal. Central to this was a policy overhaul that is due to be presented at a special party conference by the end of 2019.
In a move to address one of the most controversial divisions in the party, the SPD has approved its new Welfare State concept ‘Ein neuer Sozialstaat für eine neue Zeit’ (A new Welfare State for a new age) – a policy document that sets out the party’s vision for reform of social welfare provision.
This document, which was developed in a working group led by the head of the Young Socialists Kevin Kühnertand deputy leader of the party Manuela Schwesig, aims to bring the party leftwards and to heal the divisions caused by the introduction of controversial welfare and unemployment reforms under Chancellor Gerhard Schröder in 2003, known as the Hartz IV reforms.
The controversy over the Hartz IV reforms indirectly led to a split in the party and the formation of The Left Party/Die Linke (which took 9% of the vote in 2017). The introduction of Hartz IV is still seen as a betrayal by many SPD voters, who felt that the party had abandoned its traditional commitment to the welfare state in favour of submitting to market forces.
The Hartz IV reforms introduced a contract for jobseekers and- most controversially – sanctions if the jobseeker failed to keep to the terms of the contract. It is argued that Hartz IV created an enormous low-wage sector in Germany, which is now the biggest in western Europe, and with it an increase in social divisions. These criticisms are especially true in the east, which has a much larger low-wage sector than in the west.
The SPD’s proposals include:
- Replacement of Hartz IV with a ‘Citizens’ Payment’, with measures to keep older people on unemployment benefits for longer before they go into the Citizens’ Payment system (up to 3 years for the over 50s), less sanctions and a stronger ‘right to work’
- All child benefits to be separated from the Citizens’ Payment and consolidated into one payment
- Increase in the minimum wage to 12 euros an hour
- A basic pension for low income earners
- The right to work at home where appropriate, and recognition of work done at home by employees
It remains to be seen whether any of these measures will pass through the SPD’s coalition partners, Angela Merkel’s CDU. Indeed there has been criticism that the proposals can only lead to more trouble within the coalition. How the SPD would finance these measures is also unclear. Further, there is still criticism from the left because sanctions have not been abolished completely. However it is clear that the party sees these proposals as key to the start of its regeneration, especially in the east.