The Future Of Work And The Social Welfare State’s Survival


Steven Hill in Social Europe:

A closer look at Germany, one of the strongest economies in Europe, is revealing. Overall, the work force has become increasingly complex and fissured, with many workers moving between different types of work — from self-employed to temp, from full-time to part-time, to mini-job to werkvertragsubcontractor, and back again. More workers now supplement their income with second, third and fourth jobs. Indeed, Eurostat says the number of Germans holding two jobs at once has nearly doubled in ten years from 1.2 million to 2.2m.

Businesses especially like hiring self-employed workers because they save 25-30% on their labor costs. Employers don’t have to pay for these workers‘ health care, retirement pension, sick leave, vacations or injured worker and unemployment compensation. Self-employed women are not entitled to maternity leave. The self-employed in Germany, like in most European member states, are legally required to pay both the employers‘ half and their own half of the health care contribution. In Germany, that amounts to a minimum of 14.6% out of their wages. And the self-employed are responsible for saving for their own retirement as well, with no contributions from employers as regularly-employed workers receive.

Nevertheless, many self-employed workers are attracted to the flexible scheduling, at least at first. But after a while many grow weary of this new kind of grind. A European Commission report found that the self-employed in Germany are 2.5 times more at-risk of poverty than salaried workers. A study by the Wissenschaftliches Institut der AOK found that among low income workers, solo self-employed Germans spend an astounding 46.5 percent of their income for health insurance. Not surprisingly, one study found that about half of self-employed workers would accept regular employment if decent jobs were available.

More here.