Citizens’ money: Companies often shamelessly take advantage of funding

Several companies take advantage of the subsidies offered by the state to reintegrate the long-term unemployed for their own purposes. An example of this is the handling of the Participation Opportunities Act.

Participation Opportunity Act: A Measure for Reintegration

The Participation Opportunities Act was introduced to give long-term unemployed people a chance to enter the labor market. Employers are covered by a significant proportion of wage costs – up to 100 per cent – to reduce the barrier to hiring the long-term unemployed.

The truth is that many employers see the program as a way to reduce costs rather than investing in the professional development of their supported employees. Critics complain that the law often does not lead to sustainable integration into the labor market despite its high costs.

High stakes – small impact?

The Participation Opportunity Act is an expensive tool for the reintegration of the long-term unemployed. In the first five years after its introduction, around four billion euros were invested to create around 150,000 jobs.

After five years, the Federation of German Trade Unions comes to a satisfactory conclusion: about 40 percent of the supported workers manage to stop social benefits in the long term and remain in the labor market even after the support.

This figure shows that the program has potential, but is not achieving the widespread success expected.

Individual cases that show the failure of the program

A typical example of the program’s problems can be seen in Katrin W. After 16 years of unemployment, she found a new job as a nail designer through the law.

But the positive outlook did not last long. Despite financial support from the workplace, her employer did not pay her wages regularly, so Katrin had to sue for her work.

After changing employers, she was terminated without warning at the end of the 100 percent funding. These events show that some companies are just using the program as short-term financial support without any real interest in keeping employees in the long term.

Abuse by companies: financing as a source of short-term profit?

Companies use the funding without much interest in keeping their employees funded in the long term. This practice means that workers are often laid off after the end of support and find themselves in a precarious position again.

Long-term unemployed people are seen as low-cost workers for the funding period, rather than making serious efforts to offer them a stable outlook.

Control devices and their failure

Stefan Würzbach from the Federation of German Trade Unions says that most companies do not abuse the measure.

The existing cases are an indication that close checks are needed to ensure that the funding is actually used for the benefit of the long-term unemployed.

Support role: success factor or fig leaf?

Coaches are meant to help those affected to get a grip on everyday working life and overcome the challenges at work. Bea H. is an example of a successful implementation of this approach. After a long illness and five years of unemployment, she got a job with a construction company through the law.

Thanks to the support of her coach Jolanda Dedio, she was able to integrate professionally and received a permanent employment contract after the support period.

The limits of care: Why it’s not often enough

Close support is often presented as a critical success factor, but this support is often insufficient to compensate for systemic weaknesses in the program.

Even good support can hardly prevent companies from taking advantage of the law’s financial incentives without an interest in long-term employment. The question remains whether the program’s resources are being used effectively or whether they are instead being used to create short-term jobs that offer no real opportunities.

Lack of sustainability: Why the program may fail

Currently, more than 36,000 people across the country are employed through the Employment Opportunity Act. This shows the reach of the program, but not the long-term sustainability of this support.

The experiences of Katrin W. and many others show that the law often achieves short-term successes but does not create real job security. For many of those affected, this means they will fall back into unemployment after receiving support. Sustainable integration into the labor market cannot be achieved in this way.

Need for strict sanctions and sanctions

Corinna Geßinger from the Gelnhausen workplace emphasizes the importance of the program and hopes that it will be continued, but the upcoming budget cuts are a serious threat, the real social responsibility of employers is taking over. Stricter controls are needed to ensure that the jobs that are created are not just short-term but offer real opportunities.