Are Germany’s `Minijobs’ a Poverty Trap?

Photograph by Sean Gallup/Getty Images

Germany’s jobless rate has fallen to a two-decade low of 6,7 percent. Meanwhile, across the border in France, “President Francois Hollande ended his first two weeks in office with a thud,” Helene Fouquet and Mark Deen report, after jobless claims rose to the highest in 13 years.

Angela Merkel has been calling on other euro-zone countries to follow Germany’s example in reforming labor markets. One of the reasons for Germany’s success has been the so-called minijobs, Merkel says — they allow companies to take on workers at 400 euros a month for a maximum of 15 hours work per week.

Spanish newspapers haven’t been very sympathetic. El Pais entitled one of its reports “Wages of One-Euro-an-Hour in Germany’s Labor `Miracle.’” Criticism of the model has also been forthcoming in Germany. Sueddeutsche Zeitung pointed out that minijobs contribute so little to the social security system that a person working 45 years serving tables will entitle a worker to a monthly pension of just 139.95 euros.

So the solution, if the plan is taken up by other countries, will be to ensure that minijobs don’t become a trap that impoverishes workers over the longer term, but become a bridge to more secure and better paid employment. Germany hasn’t yet shown that this can be done.

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