Exactly ten years ago today, Peter Hartz released the results of his study entitled Modern Services in the Labour Market (Moderne Dienstleistungen am Arbeitsmarkt), which eventually became a significant part of Gerhard Schröder's Agenda 2010.
Beginning on New Year's Day 2003, Hartz I instituted such things as payments to the Federal Labour Agency for vocational training, as well as the foundation of staff service agencies called Personal-Service-Agenturen or commonly referred to as PSAs. With Hartz II, the infamous Minijobs were created, and a grant was introduced for the new Ich-AG (Me, Inc.).
The Minijob, and the lesser-known Midijob, allowed companies to hire workers with a sliding-scale tax scheme, which ostensibly made it less difficult to create new positions within the workforce. Because so many companies had complained over the years that it was difficult to hire workers for part-time employment, this part of the program was intended to make that easier. The Minijob is for workers who earn less than EUR400 per month at a company, while the Midi job is for those who earn anything above that amount, but no more than EUR800 per month.
Intended to restructure job centres, Hartz III took effect on 1 January 2004. What had previously been the Federal Labour Institute (Bundesanstalt für Arbeit) became the Federal Labour Agency (Agentur für Arbeit). The goal of the program was to halve the number of unemployed Germans within four years, and although the results have been generally quite good, the reforms have continued to be criticised. The argument against the success of Hartz IV has to do with what has been described as 'creative accounting'. Despite the complaints, the reforms have mostly done what they set out to do.
Anyone who has lived here during the last decade, has probably heard or read a reference to Hartz IV. The name has become such a part of the national parlance that it was even named the German Word of the Year in 2004 by the Society for the German Language.
Unfortunately, the term has also become synonymous with Germany's lower class and is often used in a derogatory manner, much in the same way Americans refer to Section 8, which is the name for the housing allowance that low-income families receive in The United States. The actual name for what decides how much money the long-term unemployed receive, is Arbeitslosengeld II, but in the vernacular it continues to be called Hartz IV. Many have speculated that Peter Hartz, whose name has been attached to the program since its inception, would be anything but pleased at his program's namesake.