The Minijob Trap: Reality for many Women in Germany

Laura Bauckmann
November 17, 2020

There were more than six million mini-jobbers in Germany in September, i.e. workers with a so-called 450-euro job. Some of them would probably want to work more, but: according to calculations by the ifo Institute on behalf of the Bertelsmann Foundation, it is often not worth it.

A new study shows that employment beyond a mini-job is financially unattractive for many women and mothers. According to the study "For whom is work worthwhile?" published on Tuesday by the Bertelsmann Foundation, the reason for this is the high taxes and charges for part-time or full-time employment in the low-wage sector.

An example: If the husband earns 48,000 euros gross per year, the wife would earn 5400 euros more per year in a mini-job with about ten hours per week and an hourly wage of 10 euros - without deductions due to the special regulation for mini-jobs.

If instead the woman took a part-time job with 20 hours a week for the same gross hourly wage, the family would be left with an additional 6,293 euros per year. "A second earner would have to work twice as much to have not even 1,000 euros more in her pocket per year," said Jörg Dräger, the foundation's director.

The income of single parents - and thus often of mothers - in the low-wage sector is burdened even more than that of married people. For single parents with two children receiving unemployment benefit II, even a job costing 100 euros per month or more is hardly worthwhile. Only 2,040 euro per year of a 450 euro mini-job would remain. That was 38 per cent of the additional income earned.

"In the low-wage sector, the hurdles for taking up a job are too high", said Dräger. But low thresholds are important so that such jobs can fulfil their entry function into the labour market. Women and mothers must be freed from the trap of micro and mini-jobs. To this end, the additional income regulations for single persons and single parents should be adjusted. In order to strengthen the incentives for second earners to take up work, on the other hand, a restriction of mini-jobs and a reform of spousal splitting were of central importance.

According to figures published by the Minijobzentrale at the end of September, around 6.4 million minijobbers are registered in Germany in the commercial sector and in private households. Of these 3.8 million are women. Average earnings in the commercial sector amounted to around 320 euros last year, in private households the figure was a good 187 euros.

For this to change, the Bertelsmann Foundation demands that politicians take action: "On the one hand, mini-jobs must be pushed back and on the other hand, the splitting of spouses must be reformed," says Consiglio. After all, the splitting rule used to calculate taxes for married people discriminates against those who earn less - and that is usually the women.

The foundation also appeals to the legislator to raise the supplementary income limit for Hartz IV recipients. For example, if a single parent lives on welfare, she is only allowed to earn an extra 100 euros a month. And the money for a mini-job would also be deducted to a large extent from the Hartz IV rate. According to the foundation, the result is that work for single parents in the low-wage sector is often not worthwhile.

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