Momentum Institute Presents Model for Job Guarantee for Long-term Unemployed

The basis for the model for a job guarantee for the long-term unemployed is current data from the Public Employment Service (AMS) on people who have been out of work for more than a year, including training participants, apprenticeship seekers, or people in rehabilitation programs.

First Step: Job Guarantee for Older Long-term Unemployed

"In a first step, we recommend introducing the job guarantee for everyone over 55 years old, as the need is particularly high here," says the deputy chief economist of Momentum, Barbara Schuster. "Currently, there are around 33,000 long-term unemployed who have been without a job for more than a year. Cost: 983 million euros." Costs for administration, coordination, project management, or coaching are not included in the estimate. However, the elimination of many AMS courses for the long-term unemployed would save costs in return. "In a further step, we recommend expanding to all over 25-year-olds with more than five years of unemployment. This currently affects around 16,500 people and would cost just under 500 million euros."

If the implementation works as desired in practice, all those with more than three years of unemployment could be included. In the final stage, a job guarantee could apply to all over 25-year-olds with more than one year of unemployment - that is, for more than 122,000 people, Momentum calculates. The initial costs are estimated at 3.7 billion euros - returns in the form of taxes, social contributions, or through consumption are not yet included. Momentum refers to a study by Tamara Premrov, Leonard Geyer, and Nicolas Prinz (2022), which was published, among others, as a "Working Paper" by the Chamber of Labour. The result of this study on the costs and distribution effects of a job guarantee for the long-term unemployed: "69.6 percent of the gross costs flow directly back to the state."

Job Guarantee for the Long-term Unemployed: Voluntary, Public Welfare-oriented

The job guarantee is intended as a voluntary alternative to unemployment: the long-term unemployed should be able to choose whether to continue receiving financial benefits or to accept an offered job. The concept envisions primarily the state, regions, municipalities, and non-profit organizations as employers. Private companies could be involved through wage subsidies, but there is no obligation to hire job guarantee employees.

The Momentum Institute is particularly considering public welfare-oriented activities such as care and support, visiting services, accompaniment on official and administrative errands, elderly care, childcare, and leisure education. At the local level, staff could be needed in shops for daily needs or to support the post office or local museums. Repair services, public green space maintenance, and the upkeep of parks and playgrounds are also possibilities.

Momentum Institute: Positive Effects from Job Guarantee for the Long-term Unemployed

Momentum points to positive experiences with projects like the Marienthal job guarantee and the former "Aktion 20,000" for older long-term unemployed. Momentum considers impacts on wage development and collective bargaining agreements in the private sector due to state job guarantees to be unlikely or even positive: "The wage negotiations of the social partners could move more quickly towards 2,500 euros for everyone," it says to the APA.

(APA/Red)

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