'Forced labour' returns

A WAVE of protest swept through east Germany last summer in protest against the government's swingeing cuts to social security benefits.

Since then, however, the demonstrations have died down. They are now dominated by a Maoist grouplet called MLPD.

The new law Hartz IV came into effect on January 1. It reduced the length of unemployment benefit payments to a maximum of 12 months.

Before, unemployed workers would receive an allowance equaling 53 per cent of their last wage after 63 per cent during the first 12 months of redundancy.

Now, they are paid a monthly lump sum of 345 euros (£215) plus housing benefit and are subject to means testing.

Additionally, a forced labour programme offering so-called "one euro jobs" has been introduced. Anyone who refuses to participate in it will have their benefits cut significantly.

While the street protests have died down, the political debate continues, especially surrounding this low-wage iniative.

German TUC leader Michael Sommer announced his approval of Hartz IV legislation in January.

In contrast, many leftwingers, including former SPD leader Oskar Lafontaine, have framed the abolition of unemployment allowance as expropriation.

Workers have paid tens of thousands of euros into unemployment insurance over the decades, they argue, just to find out that they have to sell most of their goods in order to get means-tested Hartz IV payments if they lose their job.

Political activists like Andreas Gruenwald, a Hamburg journalist specialising in labour market policies, have put Hartz IV into a broader perspective.

Not only is it part of Chancellor Schroeder's neoliberal Agenda 2010 but also a component of the European Union's Lisbon strategy.

This was drawn up by EU leaders, who agreed to deregulate the welfare system in order to try to become the world's most powerful economy. One of the major aims is to reduce labour costs so that European export goods will be cheaper on the world market.

Another reason for Hartz IV, Gruenwald argues, is a co-ordinated attempt to pressure trade unions to agree to lower nominal wages.

Germany has a long tradition of far-reaching wage contracts, covering all enterprises of a specific industry in a large geographical area.

This made it possible for trade unions to set wages following clearly defined macroeconomic targets. But this policy has become a thing of the past following last year's pay deals in the car industry.

Car manufacturers forced Germany's most powerful trade union IG Metall to cut wages on the grounds of short-term business figures.

The union leadership was heavily criticised by its members for accepting this change, but the employers' ace of spades was that it could threaten workers with falling below the line of poverty if they are laid off.

In this respect, Hartz IV is also an instrument to install a low-wage sector, something previously unknown in Germany. This, in turn, will improve the position of German enterprises internationally.

Left-wing trade unionists are now discussing the best strategy to get rid of "one euro jobs," which has brought forced labour back to the country for the first time since World War II.

The only precedent is Hitler's motorway construction programme, when millions of unemployed workers were forced to work for the government.

Now, 150,000 one euro jobs have been introduced. The government plans to extend the scheme to 600,000 jobs.

Workers are refused representation in works councils and are only paid an hourly wage of one-two euros (60p-£1.20).

However, the legality of the government's measures has already been challenged. A judge in the Federal Labour Court issued a statement recently saying that there is no such thing as a job lacking labour rights under German law.

Germany's consitution guarantees every worker the right to strike for better conditions and wages.

Currently, talk of strike action over the low-wage scheme is just that - talk. However, a stand by trade unions could throw a lifeline to thousands of workers.