FOCUS online: Mr. Weber, is it still worth working?

Enzo Weber: Definitely. Work offers so many opportunities for development and so many opportunities for the future that this question can only be answered with a “yes”. Political regulations should support exactly that and make people want to work.

You are a labor market researcher and lately you have worked intensively on the topic of “citizens' money.” What are your key findings?

Citizens' money has a fundamental meaning and arrived at the right time. It focuses on qualification, professional development and cooperation on an equal footing. We need this at a time when labor is scarce and needs are changing with economic transformation.

But there are definitely negative aspects too.

Yes. In general, we are seeing an increase in long-term unemployment and a consolidation of unemployment. The number of people starting to work has decreased, which is partly due to the flexibility of the citizen benefits reform. But the phenomenon as such has existed for a long time.

Since when exactly?

We have left behind a long period of crisis. This started with the coronavirus, that is, before the introduction of citizens' money. The job prospects of the unemployed had decreased significantly. The longer those crises last, the more difficult they become. Because work experience becomes obsolete and it is increasingly difficult to return to work.

Citizens' money: “The investigation is just beginning”

Returning to citizens' money: Do you mean that the reform also influences access to work?

Exactly, that's what our surveys have shown. After the introduction of Hartz IV, a significantly larger number of unemployed people entered jobs. We observe the opposite effect with citizens' money. But that doesn't have to mean that Hartz IV's rules were fundamentally better.

Those affected often accepted lower-paying and less sustainable jobs. And: Harsh penalties, like those that were common under Hartz IV, can also lead to people ending up in worse jobs or withdrawing from the labor market altogether at some point.

One of their current studies shows that since the introduction of citizens' money, 5.7 percent fewer people with basic security have found employment. Were you surprised?

First of all: the research is only at the beginning; In the future, the different components of the reform of citizen benefits will be examined. Standard rate, waiting period, penalties, etc. You should also look closely at these results.

But what about the results that are already available? Citizens' money obviously reduces the incentive to work.

I was not surprised by the current result because it is plausible. If I rely less on pressure and more on cooperation, as is the case with citizens' money, fewer jobs can be expected to be eliminated. A Hartz effect in the other direction, so to speak. The question is rather: How do we evaluate this?

“We are not talking about a boom of total objectors”

And how do we evaluate that?

It is important that the reform achieves its true objectives: higher qualifications for job seekers and better professional development. It was a known risk that fewer affected people would be able to return to work with the introduction of citizen benefit.

Why is that?

Many different components influence. For example, the standard rate increase of around twelve percent in 2023 and 2024. That's quite a lot. The more support a jobless person can receive, the less incentive they will have to look for work.

It seems that the accusations of laziness that always arise when it comes to citizens' money are justified.

We are not talking about a rise of total objectors. That's why I think these “debates about justice” are wrong. The increase in the standard interest rate was based on inflation, which meant that those receiving citizen benefits in particular lost purchasing power.

But the adjustment mechanism is designed to overdo it in the short term. This will balance out later and there will probably be a zero round next year. Then the discussion goes in the other direction: an unnecessary back-and-forth.

“Whoever rejects a job is not automatically a total criminal who rejects it”

Why does citizens' money continue to reduce the incentive to work? They said there were many components.

That's right. Another factor is the so-called waiting period for housing and goods. For one year, the employment office adequately covers the previous housing costs and heating costs. Assets are only taken into account in the first reference year if they are significant, that is, more than 40,000 euros. This reduces the pressure on citizens' benefit recipients, as planned, but may also delay the start of work.

Furthermore, the sanctions have been significantly weakened compared to Hartz IV.

This is also an important point. Citizens' money requires not only necessity, but also participation. What happens if someone doesn't cooperate? Sanctions are now significantly weaker than under Hartz IV.

This can be advantageous in improving prospects in working life. However, sanctions increase job acceptance, even in advance. Furthermore, the so-called integration agreements with employment offices have been replaced by cooperation plans. It now has a more cooperative but less binding character than before.

Anyone who looks at reports on citizens' money will find a lot of bad things. According to a study by the German Institute for Economic Research (DIW), this concept is also not well received by employees of employment offices. Respondents stated that incentives to take up employment had deteriorated since the introduction of the citizen's allowance. Furthermore, the majority felt that those receiving citizen benefits were less motivated and less accessible.

These surveys can be informative. Reviews are collected. My study revealed real results, that's the difference. In the end, the important thing is where we start and how to achieve the objectives of the reform for the benefit of citizens and at the same time encourage more people to start working.

We have to think about what we want. Should people take a job they only do for a few months? Where they cannot develop further, which is not sustainable? How do we imagine this?

Is the cliché of “searching” for the beneficiaries of citizen benefits true, in your opinion, or does the reform simply have an image problem?

I can't agree with the lazy ones. The reality regarding the long-term unemployed is different. Lack of professional qualifications, health restrictions, family obligations, language problems and many other things often play a role. That is why it is so important to start on a case-by-case basis and, for example, ensure better qualifications. And we have to create the right incentives.

However, there are people who could work but would prefer to receive citizen benefits.

These black and white images: contributors versus total objectors, that doesn't help us. Of course, some people may intentionally avoid it all. But that is the wrong approach. Anyone who rejects a job is not automatically a criminal who rejects it completely. Often, this person is likely struggling with problems that many other people cannot easily imagine.

“I think 100 percent sanctions are excessive”

That sounds very benevolent. Don't you have to take what you get?

You are right: we need a commitment to accept jobs, as the results of the study also demonstrate. But it's not worth turning it into a debate about justice. Because something like that always ends up being defamatory.

Those who provide help rise above those who sometimes need help. Of course there are motivational questions. It is precisely at these points where you have to work with the appropriate amount. Don't apply too much pressure or be too careless. Before the coronavirus crisis, long-term unemployment fell significantly. Then the problem can be controlled.

What are the right incentives, the right amount?

I have some ideas. One thing is clear: social benefits will be reduced if you work in addition to citizen benefits. Those who expand their employment often reap little benefit from their additional income. In my opinion that needs to change. There should always be a 30 percent deductible. And I suggest a boost: you should be allowed to keep more in the first year for something to really work.

Would you also modify the sanctions rules?

Yes. I think that 100 percent sanctions, that is, the total cancellation of citizens' money for violations, are excessive. As I said, harsh punishments also have the side effect of destroying trust and forcing people to do bad jobs. Therefore, I would rely on longer and not more severe sanctions. This means imposing sanctions not just for a month, but for several months, and then lifting them as soon as the person cooperates again. This creates pressure, but not excessive.

Before you also spoke about problems with qualification.

Correct. It is often debated which should take priority: grading or placement. But that doesn't have to be one thing or the other. In my opinion, it would make sense to promote more continuous training. Perhaps also in collaboration with the businessman. And it is also about investing in labor market policies.

“Introducing citizens' money was not fundamentally bad”

What do you mean?

The conditions for achieving the objectives of citizens' money (e.g. individual cooperation and qualification) must be created in a sustainable way. We need the capacity and resources for this. Currently there are trends in the other direction. The first incentives for qualification have been withdrawn for reasons of savings. You should be braver.

What bothers you most about the debate on citizen benefits?

The limitation to certain images of behavior that in many cases do not correspond to reality. I understand that this is necessary in open discourse and political competition. Democracy works like this. But: we need to debate with more substance. And focus on progress. That's exactly what we're investigating.

That means: In the end, you don't believe that citizens' money is a mistake.

Exactly. In my opinion, introducing citizens' money was not a fundamental mistake. But when it comes to work, even more things happen. There are some steps you can take now. And more scientific studies are being carried out, for example on individual reform regulations. We should examine them very carefully and learn from them.