The "Mainz model"” “

4 million workers without a job, as against 38 million in employment. These figures, referring to December 2001 and published last week, are a measure of the critical situation that Germany is now experiencing in terms of employment. In an interview published in the German weekly Der Spiegel on 14 January, Chancellor Schröder, now up for re-election, proposed that a model of support to employment, known as the “Mainz model”, be extended to other parts of the country; the model has been tried out in the Land Rhein-Pfalz, in which the city of Mainz is situated. This employment model is aimed at workers on low incomes and with low levels of qualification and at the long-term unemployed. The problem is that low-paid jobs in Germany are unlikely to attract anyone seeking a job; he/she may prefer to claim unemployment benefits instead. The Mainz model addresses this problem by providing a contribution, for a maximum of 36 months, in the form of a state subsidy, variable in relation to gross income. The risks of “combined salaries”. On the proposal to extend the “Mainz model” to the whole country German Caritas has intervened, pointing out its pros and cons. According to Caritas, a positive aspect is the State’s subsidy of the cost “of the entire social insurance contributions that, in the low salary sector, is a major obstacle to the hiring of workers”. Caritas also welcomes “the subvention of the social welfare tax that has to be paid by workers”; this it considers “a useful means of encouraging the long-term employed and those on social security benefits to find a job”. German Caritas calculates that the Mainz model “in the best of hypotheses will lead to the creation of between 15,000 and 30,000 new jobs”. But what’s more important, in its view, are other questions that disadvantage or at least tend to limit the model’s positive impact. In the first place, there is a “clear competition with other policy instruments for regulating the labour market that also provide for combined salaries (i.e. salaries topped up by the State)”. In the second place, Caritas points out, “the effect on income and employment will be reduced since the income generated by work will in large part be supported by social welfare”. Thirdly, “the time limit of the subsidy will in the long term wipe out the improvements in income and the effects on job creation”. Who thinks of the most disadvantaged workers? Other weaknesses of the model, as of other models of combined salary, are, in the view of German Caritas, to be identified in the lack of support given to the socially most disadvantaged. The models in question are “especially suited to individuals close to the labour market, such as women in periods of leave for family reasons or those unemployed who can benefit from a period of vocational training or a professional qualification”. More problematic is their application “to the long-term unemployed who present real obstacles to finding a permanent job, such as age, poor health, psychiatric disorders”. What these persons need is a kind of personalized advisory service and not incorporation in an all-purpose model: they need a “quantitative and qualitative transformation of the services that assist and accompany their placement in work in the sense of aid and support on a case by case basis”. Important effects for these low-level jobs may only be achieved, concludes Caritas, if the fiscal burden be further reduced. “That is why proposals for a graduated scale of social security contributions for those on low incomes are desirable”. Patrizia Collesi