German politician Sahra Wagenknecht (The Left) has criticized the reform of the German labour market by former Chancellor Gerhard Schröder, called “Agenda 2010”. She makes this reform responsible for one of the largest low-wage sectors in Europe. Some of her numbers are correct but not all of them.
During the campaign for the European elections, Sahra Wagenknecht spoke in Düsseldorf on May 7th about the low wages in Germany: “What were the Agenda 2010 labour market reforms that led to one of the largest low-wage sectors in Europe emerging in Germany? (…) One in four today works in the low-wage sector, and in the case of young people even one in three, and most of them only in temporary jobs.“ Her speech can be found on Youtube.
At the beginning of her statement, she criticised the labour market reforms, which have led to the emergence of one of the largest low-wage sectors in Europe in Germany according to her point of view. In the low-wage sector, workers are paid well below the average wage level of the labour market – less than two thirds of the median wage, to be exact.
Unemployment rate has fallen
The basic building blocks of Agenda 2010 related to the labour market. The so-called Harz IV reforms were an important part of this. Here, the criteria for reasonable work were tightened, thus more jobs were available which had to be carried out by the unemployed. If jobs were not accepted, sanctions threatened. In addition, the duration of unemployment benefits for unemployed persons aged 55 and over was reduced from 32 to 18 months and for those under 55 to 12 months.
In her statement, Sahra Wagenknecht refers only to this aspect and ignores the positive effects of the Agenda 2010 reform. In 2010, the unemployment rate was 3.2 million and fell to 2.3 million people in Germany by 2018 according to official statistics.
Many earn low wages
A study by the Hans Böckler Foundation from 2012 confirms Wagenknecht‘s statement that Germany is one of the largest low-wage sectors in Europe. In 2015, every fourth employee in Germany continued to work in this sector and earned less than 10.22 euros per hour according to newer statistics of the Foundation. Thus the statement that every fourth person today works in the low-income sector is true. A further study by the Hans Böckler Foundation also confirms that every third person under 35 years works in the low-wage sector.
According to the Institute for Employment Research (IAB), however, only one in twelve worked under the conditions of a fixed-term contract. Out of 38 million people employed in Germany in 2017, that is about 3.15 million workers, the German newspaper “Der Tagesspiegel” reports. Sahra Wagenknecht does not give a concrete number regarding fixed-term employment contracts but she says that “most of them are in temporary jobs”. We define the term “most people” as at least 50% of all employment contracts in Germany. Therefore, we rate this part of her claim to be false.
We consider the overall statement to be largely true. However, the low-wage sector is not placed in a sufficient context. Sahra Wagenknecht completely ignores the positive effects of Agenda 2010.
RESEARCH | ARTICLE © Magdalena Hönig and Louisa Huttenlocher, Hochschule der Medien Stuttgart, DE
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