The unemployed in Germany are Europe’s poorest

by Mattia Rosini - 2013.04.24

Research from the Wirtschafts und Sozialwissenschaftliches Institut shows that unemployed people in Germany are the poorest in Europe, with almost 68% at risk of poverty in 2010. This percentage is the highest in the EU, where the average is 46%. The study lays blame on the failings of the welfare reforms introduced since 2003, known as the Hartz IV reform. Since its introduction, the percentage of unemployed people at risk of poverty has increased by 26%. The reasons for this increase include the fact that, in Germany, after one year of claiming unemployment allowance, the subsidy is no longer tied to final salary and instead switches to a standard rate of about €800 a month. This is just about half of the average national income and just about covers the basics. This keeps the unemployed under the poverty line, which in Germany is €952 a month. The institute proposes to extend the higher rate of unemployment allowance to 80 weeks, in line with neighbouring Switzerland (while in France, for example, the higher rate lasts two years).