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Sunday, November 26, 2006

Just Enough to Live On

We hear a lot about the overly generous European welfare state. How generous is it? I'll let you decide in the case of Germany. Germany has defined the minimum monthly amount needed to subsist, €345 per month (approximately $450, or, about $15 per day) plus rent and heating:

What's the Price of Life?, by Max Henninger, Spiegel Online International: How much cash does a person need to survive? Germany's welfare institutions have calculated a precise answer, now confirmed in a decision by the Federal Social Court: €345 per month is officially considered the minimum subsistence income, rent and heating not included.

The figure, in effect since German Chancellor Gerhard Schröder introduced new welfare reforms in 2004 and 2005, was recently contested in court by a woman who argued that her three-person family could not survive on the €1,052 it was getting in rent and welfare payments. But the court ruled on Thursday that the sum is adequate. ...

[T]he court ruling ...[comes] only a few weeks after a high-profile public debate on the existence of an "underclass" in German society. Reactions to the court ruling vary -- not surprisingly, the conservative press interprets the court decision as hard but necessary, while liberal and left-leaning papers criticize it as unjust.

The conservative daily Die Welt ...[says]: "It's time to remember that the welfare payment in question is intended for needy people and financed by tax payers. Far too many people are treating the welfare system as if it were a question of picking out for themselves whatever they feel they would like." Such behavior, the editorial continues ominously, will ultimately "ruin the welfare state"... What's more, raising the level of the monthly transfer would entail cutting other services such as school subsidies... "A state that cares for its citizens has to enable them to take care of themselves," it writes. "And in today's globalized world, the key to that is education -- it provides the only basis for helping the genuinely needy both today and tomorrow."

The concept of a minimum subsistence income is easy to define, according to the center-left Süddeutsche Zeitung: "It's the amount of money a person in Germany needs in order to just stay alive." But the paper's editorialist can't help noticing that "the minimum is sometimes higher, sometimes lower, depending on who gets it," from parents, to the long-term unemployed and asylum seekers. The discrepancies are striking, ... with asylum seekers finding themselves at the very bottom of the food chain. The paper argues that the solutions to the country's social problems currently being offered ... are inadequate and even phony. There are people who cannot support themselves, "sometimes it's their own fault, and sometimes it isn't." The paper argues that although the welfare state promises them a minimum subsistence income, "...not a single euro is made available for education and childcare, for example."

The Financial Times Deutschland joins in the discussion by invoking the virtues of asceticism: "It may not be easy to live on €345 a month (plus rent), and it's not fun," the business daily writes, "but it's possible." ..."[T]he new welfare system has the goal of providing people with a minimum subsistence income -- no more than that." ... "€345 plus rent doesn't leave a lot of leeway, but it's enough for a simple life."

    Posted by on Sunday, November 26, 2006 at 02:34 AM in Economics | Permalink  TrackBack (0)  Comments (18)

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