They work, but still need social benefits: too many people in Germany find themselves in this situation. Why is that?
In his characteristically straightforward style, German Chancellor Friedrich Merz presented his cabinet's views on one of the federal government's next major priorities from the Bundestag rostrum - plans to reform social benefits, known as Bürgergeld. In his words, work should be worth it - Merz wants "people in Germany to be able to see again that their efforts are paying off - and that the principle of pay linked to work results is being applied".
But his words are somewhat contradicted by a statistic that appeared a few days earlier: in 2024, around 826,000 working people were dependent on social benefits (Bürgergeld). This represents an increase of around 30,000 people compared to the previous year - the first increase since 2015.
It was in 2015 that the minimum wage was introduced in Germany. At that time, over 1 million working people were still dependent on social benefits. Since then, their share has been steadily decreasing. In 2024, these benefits cost the state almost 7 billion. euros - over 1 billion more than paid in 2022.
"It is unacceptable that hundreds of thousands of people depend on benefits, even though they work. This means that we tolerate low pay and labor exploitation," Left Party MP Cem Ince told DW on this occasion.
The growth of the minimum wage
According to Ince, these data show that the minimum wage in Germany is simply too low. Although the previous government raised it significantly - to 12 euros at the beginning of 2023, it has only increased minimally since then - to the current 12.82 euros per hour.
It has now been announced that the minimum hourly wage is to increase even further: from January 1, 2026, it will become 13.90 euros, and a year later - 14.60 euros. But that is less than the 15 euros an hour demanded by the Social Democrats.
Helena Steinhaus, founder of the group Sanktionsfrei ("No sanctions"), which supports people living on benefits, points out that the small increases have not kept pace with the rise in rents and living costs in recent years. The average rent in Germany rose by 4.7 percent last year alone, and in Berlin by as much as 8.5 percent. "That's why more and more people can't live on the minimum wage, even if they work full-time," says Steinhaus.
The problem with part-time work
Some economists, however, argue that the minimum wage has little to do with the number of workers who need benefits.
"It must be admitted that most of these people are not working full-time. Most of them are in training or have part-time jobs," says Holger Schäfer, senior economist at the Institute for German Economics (IW). "The minimum wage is not the main thing here, because the reason why people cannot live on their income is not due to the low hourly wage, but to the low number of working hours."
Data from the Federal Employment Agency confirms this: of the 826,000 workers who receive benefits, only around 81,000 worked full-time.
According to the left-wing MP Ince, however, this is no excuse for low wages. "The number of people who receive benefits depends largely on low wages. One of my recent investigations revealed that in half of Germany's major cities, people who earn the minimum wage for full-time work cannot afford adequate housing and are dependent on financial assistance," he says.
Growth of poverty
The reason why many people only work part-time is simple, says Helena Steinhaus: they have children or relatives who need care, and many cities in Germany lack childcare infrastructure. According to IW, last year, 306,000 children in Germany under the age of three did not have a place in a nursery or kindergarten, even though they are legally entitled to one.
A 2021 study by the Institute for Employment Research (IAB) found that the more children working people have, the more likely they are to need benefits. Left Party MP Ince is convinced that if the state invests more in childcare places, this will allow many people to escape the trap of part-time work.
Holger Schäfer warns, in turn, that raising the minimum wage is not a solution and could have the opposite effect - for example, if companies limit their demand for labor because of the higher pay.
Steinhaus counters that employers' organizations have been making this argument for years, but not once in the past decade has this concern been confirmed. "Of course, there are companies that experience difficulties when the minimum wage increases, but overall most of them benefit from the fact that they can hire people cheaply."