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Jobs in Germany roundup: What an SPD-led coalition could mean for workers

Jobs in Germany roundup: What an SPD-led coalition could mean for workers
Archive photo shows a working from home set up in Germany. Photo: picture alliance/dpa/dpa-tmn | Christin Klose
We are still a long way off of knowing what Germany's new government will be. But with talks underway, we looked at what the possible Traffic Light coalition could mean for the future of working life.

The centre-left Social Democrats (SPD) secured a victory by a whisker in Germany’s election on Sunday, closely followed by the centre-right Christian Democrats (CDU) with their Bavarian sister party, the CSU. 

As we’ve been reporting, both parties want to form a coalition with the Greens, who came third in the election, and the Free Democrats (FDP) who landed in fourth place. As the SPD came first in the election they are seen as having an advantage on trying to form a coalition. According to polls, the German public is also most in support of an SPD-led ‘Traffic Light’ coalition government.

Here’s a look at what this constellation could mean for people working in Germany. For more on what the coalitions mean and what could happen next, check out our story here:

Jamaica or traffic light: What’s next for Germany and what does it mean?

Traffic Light (Ampel) – SPD-led coalition with Greens and FDP 

MINIMUM WAGE: With the Social Democrats at the helm, the Traffic Light would have a focus on raising the minimum wage. 

The SPD wants to hike up the German minimum wage by about two euros, taking the so-called Mindestlohn up to €12 an hour. This is an ambition it shares with the Greens which wants to see the minimum wage go up “immediately”.

The business-friendly FDP doesn’t mention increasing the minimum wage in its manifesto – and the party has been against minimum wage thresholds in the past. But with an SPD-Green coalition it seems likely that this could be pushed through. 

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STARTUPS: Here’s where things could work out quite well in this constellation. The SPD describe start-ups as “important growth engines for the economy” and say they want to turn Germany into the “startup capital of Europe” by introducing easier access to capital and state-funding, offering organisational support through agencies, and fostering a “culture of second chances” which would include changes to bankruptcy law.

For freelancers and solo-entrepreneurs, a new type of insurance would ensure that they were covered during difficult times through the job centre – a bit like jobseekers’ allowance for the unemployed. They would also be integrated in the pension system step by step, while the social insurance for artists would be expanded to cover a wider range of self-employed individuals. 

The SPD’s chancellor candidate Olaf Scholz in a group picture after the meeting of the SPD parliamentary group in the Bundestag on Wednesday. Photo: picture alliance/dpa | Michael Kappeler

The FDP is also pro-innovation – they say they want to “awaken the entrepreneurial spirit” in Germany.

They also want to see more support for the self-employed. “We want to eliminate unequal treatment and, for example, finally reduce contributions for the self-employed to statutory health insurance,” the party’s manifesto says. 

Lots of foreigners in Germany are self-employed or work in startups, especially in cities, so it will be interesting to see how this discussion develops in coalition talks. 

TAXES: This could be a sticking point. The SPD wants lower taxes for lower and middle class earners – but not for the rich. In their 2021 manifesto, the SPD promises to “lower taxes for the majority”.

“We will carry out an income tax reform that improves small and medium incomes, strengthens purchasing power and, in return, makes the top five percent pay more for the financing of important public tasks,” they say.

While the liberals are keen for lower taxes across the board, the bulk of their tax relief initiatives would be for high-earners and businesses – so this is bound to create problems in this kind of constellation. 

The Greens have a fairly similar tax policy to that of the SPD, although they would offer more tax relief to the least well off.

READ ALSO: EXPLAINED: What the German parties’ tax pledges mean for you

INNOVATION AND DIGITAL UPGRADES: This is an important point in all the parties’ programmes, not least because Germany is seen as falling behind other countries on these points. 

For the Greens, though, innovation has to have a climate focus – the bottom line of their party. 

“We are launching a decade of investment in the future, the Greens manifesto says. “In fast Internet, in cutting-edge research, in charging stations, in hydrogen technologies and in modern urban development.

“We want to make energy-intensive industries technology pioneers in the development of climate-neutral processes.

“Green financial markets play an important role in the fight against the climate crisis.”

The Free Democrats are calling for a ‘Ministry for Digital Transformation’.

“To create a leaner and more efficient government, we want to bundle competencies in one ministry and link it closely with the other government departments,” says the FDP programme. “This is the only way we can shape the digital transformation of the state, society and the economy quickly, efficiently and consistently for the benefit of everyone in our country.”

UNEMPLOYMENT SUPPORT: The SPD wants to reform the controversial Hartz IV unemployment benefit or Arbeitslosengeld II – the programme it came up with back in 2002. The SPD say they want to switch to a benefits system based on encouragement rather than sanctions.

The SPD want to call it: Bürgergeld. (Which translates to ‘citizens’ fund’).

The Greens want to get rid of Hartz IV and replace it with a guaranteed security system that “protects against poverty and guarantees the socio-cultural minimum subsistence level without sanctions,” says their manifesto. 

The FDP stands to the right on this issue and is is in favour of restricting unemployment benefits. They want to encourage more people into the workforce. 

FOREIGN QUALIFICATIONS: In its section on ‘Zusammen Leben’ (living together), the SPD dedicates a paragraph or so to the discussion of jobs. As we saw in the aftermath of Brexit, third-country migrants in Germany face major hurdles in getting their professional qualifications recognised in Germany, meaning some lawyers, accountants, master bakers, etc., are unable to prove their competence in their field without jumping through numerous hoops.

The SPD says it wants to ensure that foreign qualifications are recognised in Germany. It also wants to end discriminatory selection policies for work in the public sector. At present, a number of public-sector roles (at state universities, for example) are EU-only jobs, meaning highly qualified non-EU people are shut out from applying for them. According to the SPD’s manifesto, this would end if they were in power. 

READ ALSO: 

Other interesting points:

In its manifesto, the FDP calls for more flexibility when it comes to working hours, in particular. They call for weekly instead of a daily maximum working hours, which would make it possible for people to work four instead of five days for example. 

“While our competitors stand for ‘more of the same’ or a swing to the left, we stand for freedom, modernisation and sustainability through innovation,” say the FDP.

The Greens want to cut red tape in the workforce. “By reducing bureaucracy, providing support for succession and and targeted support for training in the skilled trades, we want to ensure the future viability of a strong skilled trades sector,” the party says in its manifesto. 

READ ALSO: What a CDU-led coalition could mean for foreigners in Germany

Is this coalition going to happen?

We have absolutely no idea at this stage. Talks are at the very beginning and we’re set for weeks or months of negotiations but we’ll keep you posted on the latest developments. 

Jobs in Germany

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