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Government looks to Germany for job creation schemes

  22nd August 2012      
 Company News

Analysing the competition and how they are striving is what the British Government ministers are hoping to discover in a bid to find suitable employment changes that could be implemented to help the stagnant UK economy.

Germany, the economy that refuses to be dragged down like many other struggling nations throughout the globe; their answer to rising employment is offering ‘mini-jobs’.

Under the mini-jobs scheme, whereby more than one mini job can be taken on, workers would be exempt from having to pay tax and national insurance, and would earn less than £314 per month; this translates to E400 in the current German scheme. The idea would implement an easy-to-administer flat rate of wage taxes, insurance and pension contributions to keep employer time and costs down.

In contrast to the proposals some sceptics say that the German scheme, although showing record low unemployment figures, it isn’t all as it seems whereby it is providing the opportunity for cheap labour and pushing more workers into poverty. The biggest sector bearing the brunt and receiving ridiculously low wage rates is in hospitality and cleaning. Unlike the Uk, German does not administer a minimum wage level and this system has led to increased part-time work while making full-time work almost non-existent.

“It was sold as a way to bring the long-term unemployed back into the labour market. Employers would get to know an employee and then hire them on a permanent basis. But that hardly ever happens,” said Holger Bonin, labour market expert at Germany’s ZEW think-tank.

In the UK, Len McCluskey, general secretary of the Unite union, warned the scheme would lead to an “underclass” of workers without real prospects.

Akin to a four day week idea cutting overheads to employers for sure however cynics believe it is just a good way to distort employment figures and drag job growth over a longer period. However on a positive note, the very fact that we do have a minimum wage in the Uk it should iron out the apparent wrongs that the German’s complain about and in theory, cap the amount of hours required to work.

These possible plans come on the back of ministers accused of ‘pussyfooting around’ with business growth and not dealing with effective ways to encourage new job initiatives.

George Osborne, said that the idea was being given serious consideration. “What I can tell you is that this is being looked at in government. There are lots of ideas that are being looked at as part of the deregulation drive, and this is one of them.”

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