Income from employment at the minimum wage is significantly higher than that from receiving the citizen’s benefit (bürgergeld). This is the result of a study published on Wednesday by the Economic and Social Science Institute (WSI) of the Hans Böckler Foundation. The result applies throughout Germany and is independent of household composition. For a single person working full-time at minimum wage, the average income advantage is 557 euros per month.
Singles with a child have, according to the study, even 749 euros more available through full-time minimum wage employment than from receiving the citizen’s benefit. For a couple with two children, where one person is employed full-time at minimum wage, the advantage amounts to 660 euros.
In East Germany, including Berlin, the wage gap is slightly larger than in the West. For singles, for example, it averages 570 euros in the East compared to 549 euros in the West. Regional differences also exist in the size of the income advantage from employment – but in many cities and districts, the differences from the national average are rather small.
The smallest wage gap compared to the citizen’s benefit is, according to the study, in areas with very high rents, such as Munich and its surrounding areas, or Hamburg. In Munich, for example, it amounts to only 379 euros, and in Hamburg to 493 euros.
According to WSI, the fact that there is a significant wage gap between full-time minimum wage employment and receiving the citizen’s benefit across Germany is a result of appropriately designed social benefits. With housing allowance, child benefit, and child supplement, there are benefits intended to prevent employees from having to rely on the citizen’s benefit at all.
“Currently, the citizen’s benefit is again at the center of a debate that is often polemical,” explained WSI’s scientific director, Bettina Kohlrausch. A frequently heard allegation is that it is not worthwhile for citizen’s benefit recipients to work because the benefit is too high. “The figures from this study again show that citizen’s benefit recipients, regardless of household type and the region in which they live, have less money than employees working at minimum wage.” In regions where the gap is smaller, this is due to high rents there, Kohlrausch emphasized.
In this field, unlike the level of the citizen’s benefit itself, “there is actually urgent political need for action.” The WSI director cited “the creation of affordable housing, which would relieve both public finances and lower incomes.”
For the study, the institute carried out model calculations for three typical household types – single, single with child, and couple with two children with one employed person. All relevant taxes, the citizen’s benefit, and other social benefits were taken into account.
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