On March 14, 2003, then-German chancellor Gerhard Schröder announced Agenda 2010, a series of reforms executed by the German government. More than 10 years later Agenda 2010 is seen as one of the leading causes of poverty in Germany.
Agenda 2010 was created to accelerate economic growth, create jobs and ultimately reduce unemployment. Current data on Germany may seem to support the claim that Agenda 2010 has worked well and that perhaps isn’t one of the causes of poverty in Germany. The bureau of labor statistics sites a continual drop in unemployment, reaching a low of 3.9 percent in April 2017, and World Bank figures show a gross domestic product of $3.467 trillion for Germany in 2016.
The way Agenda 2010 achieved those results was by creating a new, flexible, exclusively part-time employment structure. The motivation was that an employed citizen was better than an unemployed one. To create this new type of temporary work, Agenda 2010 deregulated to encourage employers to hire part-time workers.
Agenda 2010 focused on getting the unemployed back to work. It also created what is known in Germany as the mini-job, a part-time employment that pays 450 euros a month tax-free. As the data shows, employers hired, and the unemployment rate dropped, but this system has caused poverty in Germany to reach its highest since reunification.
German news site DW reported a German study that classified 12.5 million Germans as poor. The poor are classified in Germany by earning less than 60 percent of the median household income, which for a single household is around 900 euros a month. Although Germans are employed, those employed in mini-jobs earn 450 euros, half of the median household income of a single household.
The Federal Agency of Statistics for Labor in Germany cites 7.5 million Germans working mini-jobs and two million Germans working two jobs. The causes of poverty in Germany can be directly linked to Agenda 2010, which created more employment opportunity while also creating a new working poor. During an interview with Euronews, Dierk Hirschel, chief economist of Verdi, spoke on the issue, “The problem we face in Germany is that one in five workers are paid less than ten euros an hour, they are the “working poor.”
– Yosef Flowers