Magdeburg alternative
Magdeburg Alternative is a reform concept economist Ronnie Schöb and Joachim Weimann from the Otto von Guericke - University of Magdeburg , which aims to create jobs in low-wage sector with a combined wage model. The incentives to look for work are to be increased and, at the same time, gross wages for low-skilled workers are to be reduced. The concept was developed by the professors in 2002 and subsequently published.
concept
After a preliminary analysis and research into the causes of mass unemployment in Germany (for example, gross wage costs for low-skilled workers in Germany are too high), the authors of the “Magdeburg Alternative” define a four-point program as the core.
Accordingly, the Federal Government reimburses those employers who recruit social security or unemployment benefit recipients in accordance with the collective bargaining regulations for the lowest wage group, the entire paid social security contributions , i. H. Employer and employee contributions. The authors see the advantage of this measure as a reduction in labor costs of around 35 percent, while at the same time the net wage of the new employee remains unaffected.
In order to prevent existing employment relationships from being shifted to the attractive social insurance-free employment model, the Magdeburg Alternative concept aims to use two instruments to rule out displacement mechanisms. For this purpose, the number of employees in the low-wage sector should be registered in every company on a key date . The company would only benefit from the state exemption from social security contributions for these jobs if this reference value is exceeded by actual new hires. If this number of new hires falls again and falls below the reference value, the jobs will again be subject to social security contributions.
Second, Schöb and Weimann want to prevent the outsourcing of jobs by giving existing companies additional incentives to expand their employment. Therefore, according to the concept, existing companies would not only repay the social security contributions for the newly hired aid recipient. They also received reimbursement of the social security contributions for a worker who was already employed on the reference date. The scientists hope that the fact that companies that expand employment will be reimbursed twice as much for a new hiring as a newly created company that takes over work by outsourcing, a stop or at least a slowdown in job offshoring.
As the third key point of the Magdeburg alternative, the economists see a further tightening of the reasonableness criteria for job seekers . In their concept it says that anyone who is able to work and refuses a reasonable job offered to them forfeits their right to help from society. In addition, in a fourth step, the political parties would have to agree to a permanent term of this model of social security-free employment in order to secure the long-term effects on the labor market .
Effects
The authors believe that their model will create around 1.8 million jobs and at the same time relieve the state of more than four billion euros net annually. Although the federal government has to take over the social security contributions , this does not result in any additional expenditure because the unemployment’s medical expenses have already been taken over. Now this money is paid into statutory social security instead . The state ensures that a pension entitlement is built up and thus prevents additional social assistance that may become necessary in old age.
Schoeb and Weimann describe their model as a consensus-oriented alternative to the Hartz reform proposals of 2002 and the concept of the Munich Ifo Institute . They criticize previous combi-wage models, such as the “ Mainz combi-wage model ”, as a failure, because it only starts on the supply side and subsidizes the net wage, not the gross wage as in the Magdeburg model. In addition, their model has the advantage that it does not interfere with collective bargaining autonomy . According to Schoeb, labor market policy in Germany aims to stabilize the middle class, but is losing sight of the problem of around 2.5 million unskilled or low-skilled long-term unemployed.
criticism
Critics of the model doubt that the proposed instruments to prevent deadweight and crowding-out effects on the entrepreneurial side could work. This would reduce the number of actual new jobs, experts reckon with less than a million. This would automatically mean that the state would not achieve any financial savings, but would have to spend more money. At the same time, experts expect problems with the compatibility with EU funding and subsidy guidelines .
The "Magdeburg Alternative" model was part of the draft election program of the state executive committee of the Left Party.PDS in Saxony-Anhalt. After violent criticism from the party's trade union wing, which pointed to the risk of wage dumping through this model, and from attac, the majority of the delegates rejected this model at the state party conference in Magdeburg of the Left Party.PDS.