![]() ![]() However, they have always been controversial. The reforms are often credited with having created 2.5 million jobs for the German economy and having helped the German labour market remain strong throughout the recession. It rose slightly during the financial crisis of 2007-08 and then continued its downward trend, reaching 5.5 percent by the end of 2012. In the three years after 2005, the German unemployment rate fell from 11 percent to 7.5 percent. Over a period of three years, the reforms aimed to integrate 2 million unemployed into the labour market, and were intended to trigger an economic upturn. The merger of social welfare benefits with long-term unemployment benefits (Hartz IV).Benefit cuts of up to 30 percent if a person on unemployment benefits refused to take up a reasonable offer of work (Hartz IV) and.Restructuring the Federal Employment Agency and creation of job centres for more effectively assisting the jobless with their job searches (Hartz III).The creation of part-time job opportunities with a low threshold and minimum salary, “Mini-jobs” and “Midi-jobs” (Hartz II).A grant for entrepreneurs, known as the “Ich-AG” (Me, Inc.), to encourage new businesses (Hartz II).The creation of Personal-Service-Agentur (PSAs) to act as agencies to place unemployed people with employers (Hartz I). ![]() After several amendments and its incorporation into Chancellor Schröder's Agenda 2010, it resulted in one of the most extensive social policy reforms in Germany since the Second World War.įollowing the Hartz Commission's recommendations, four Laws for Reform of the Job Market (or Hartz reforms) were enacted in stages between January 2003 (Hartz I) and January 2005 (Hartz IV). During summer 2002, the Hartz Commission drafted a report which was intended to propose a reorganisation of Germany's employment services. ![]() Hartz took on the role of head of the commission for modern services in the labour market, and soon became the strategic leader of the reforms, which led to the unofficial but widely used term, “Hartz reforms”. Schröder, the political head of the reform, commissioned Peter Hartz, Volkswagen's HR director, to design a set of policies that would, in the first instance, reform the German Federal Employment Agency, but would eventually result in the most comprehensive reform of the German labour market to date. In 2002, the newly-elected Red-Green coalition government under Chancellor Schröder took action to tackle economic stagnation and rising unemployment rates in Germany. ![]()
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