Minimum Wage versus Citizens' Income: How Much Is Paid Out in Germany?
Germany's welfare benefits, including the citizen's allowance, have become hot topics of political debate in recent months. A new study sheds light on the income disparity between minimum-wage workers and those receiving citizen's allowance.
The study, conducted by the Economic and Social Science Institute of the Hans Boeckler Foundation, reveals that a full-time minimum-wage worker in Germany earns approximately €2,222 per month, while a single adult receiving citizen's allowance receives around €563, plus separate accommodation and heating subsidies.
Here's a breakdown of the monthly income for each group:
| Category | Monthly Amount (Gross/Net) | Description | |-----------------------------|-----------------------------------|---------------------------------------------| | Minimum-wage worker | ~€2,222 gross per month (full-time) | Based on €12.82 per hour, 40h/week, before tax | | Citizens' allowance recipient | ~€563 per month (basic living) + accommodation/heating support | Social benefit for those unable to work, net amount for living expenses |
The difference in income is substantial, reflecting the gap between paid employment and social support. The citizen's allowance is designed as a safety net and is not intended to match employment income levels.
The study also compared the disposable income of single individuals, single parents, and couples with children in all regions of Germany. In every case, full-time minimum-wage workers had more disposable income than those receiving citizen's allowance.
For instance, a single mother working full-time at minimum wage has a disposable income of €2,532, while a single mother on citizen's allowance has a disposable income of €1,783, a difference of €749.
The current government, a black-red coalition, is facing a substantial hole in the federal budget, which may contribute to the push for social welfare reforms. Meanwhile, the far-right Alternative for Germany party has been pushing a narrative that immigrants in Germany are milking the country's welfare system, despite evidence to the contrary.
Chancellor Friedrich Merz has spoken out in favour of cuts to citizen's allowance, including potentially enforcing a cap on payments towards rent. Labour Minister Bärbel Baas (SPD) is reportedly planning to present a draft for a citizen's allowance reform after the summer break.
Bettina Kohlrausch, the WSI director, believes that the focus should be on creating affordable housing instead of adjusting the amount paid in citizen's allowance. She also suggests offering training to employable people on citizen's allowance as a means to help.
It's important to note that the study does not provide information on how the disposable income of minimum-wage workers and citizen's allowance recipients compares to the average income in Germany. Nor does it take into account other factors that may affect disposable income, such as additional childcare costs or medical expenses.
Despite these limitations, the study underscores the significant income disparity between minimum-wage workers and those receiving citizen's allowance, highlighting the need for careful consideration in any potential welfare reforms.
[1] Source: Minimum Wage in Germany [2] Source: Citizens' Allowance in Germany [3] Source: Hans Boeckler Foundation Study [4] Source: Citizens' Allowance Explained [5] Source: Minimum Wage Calculation
- The study from the Economic and Social Science Institute of the Hans Boeckler Foundation reveals a substantial income disparity between minimum-wage workers and recipients of citizens' allowance in Germany's business sector, with many minimum-wage workers having more disposable income than those on welfare.
- As the current German government considers potential welfare reforms in response to financial pressures, the focus of debate in politics regarding personal-finance issues often revolves around the citizens' allowance, particularly the prospect of cuts and changes to the system, such as capping rent payments for recipients.
