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Should we all get €12,000 a year?

What would happen if everyone was suddenly paid €1,000 a month with no strings attached? "Let's try it," says Michael Bohmeyer, who raised the money through crowdfunding and will now experiment with the idea of a basic income for one year.

Should we all get €12,000 a year?
Martin Bohmeyer has not worked for money in six months. Photo: DPA

The 29-year-old lives in a rented apartment in Berlin with his wife and their daughter and eats lunch in a welfare kitchen. Having time is more important than having money, he says.

He has come to that conclusion after living on a self-imposed basic income for half a year. As a web developer who helped start two companies, he now gets paid without having to work, so he stopped.

"Since then I've had the most spectacular, thrilling and exciting time of my life," he says.

His health improved, he spends more time reading and he is now involved in several non-profit projects, among them an independent radio station.

'Money doesn't come out of the wall'

Projects like that are why Germany needs an unconditional basic income, its supporters argue. Instead of the current jungle of social services and benefits, everybody would receive one pay cheque a month from the government of €1,000, regardless of whether they were working or not.

Most backers of the idea say €1,000 would be a fair amount. That sum is endorsed by Götz Werner, the most prominent backer of the basic income idea (Grundeinkommen) in Germany.

Werner is the founder of dm, Europe's biggest drug store chain, and promotes the basic income in articles and speeches around the country.

Those who want a higher living standard, says Werner, will continue to work. Everybody else will contribute to society by pursuing their true passions.

Even basic income critics concede that it could make life more fulfilling.

But people like Hilmar Schneider, the former director of labour policy at the Bonn-Based Institute for the Study of Labour, warn that the concept is economically unfeasible.

"A basic income of €1,000 for everyone… would raise government expenditures into astronomical spheres," Schneider told the Frankfurter Allgemeine in 2010. "Those making such demands apparently think money is like electricity and comes out of the wall."

One economist estimated implementation in Germany would cost more than €100 billion.

The idea certainly has yet to break into the political mainstream, despite some pockets of support it has in parts of the media and left-leaning parties. One of the Left Party's two leaders, Katja Kipping, promotes the basic income but so far has failed to convince her party to officially adopt it.

And the ideologically diverse Pirate Party made the basic income part of its pitch before the last general election but did not get enough votes to enter parliament.

Frustrated with the lack of political momentum, Bohmeyer started his own initiative. "Mein Grundeinkommen" wants to show the concept works in a real-life experiment.

"The unconditional basic income offers one of the biggest potentials to move our society one step forward," he says.

'I would read Karl Marx'

With eight weeks to go before the crowdfunding drive ends, Bohmeyer took the first hurdle on Thursday when his campaign reached the €12,000 it asked for. The money came from more than 430 supporters, some of whom gave €1,000 each.

And while Bohmeyer will host an online community for supporters to discuss what they would do with the money, there are no criteria for a winner, who will be chosen at random.

Some supporters are already sharing ideas for what they would do.

"I would pay back my debts faster, would continue to work, would buy healthier food and do all the things that came second for financial reasons," one said.

Another wrote, "I would work less and spend more time with my children."

"I would read Karl Marx, help refugees and do yoga every day," said a third.

Even without an enforcement mechanism, Bohmeyer is convinced the winner will not put up their feet for a year.

One doesn't make a study

"I believe that every one of you contains great potential, regardless of whether you have specific ideas, projects or applications," Bohmeyer told supporters in a video.

"Maybe you're like me and need the rest from always having to think about money to have entirely new thoughts and ideas," he added.

That is not as unlikely as it may sound, some economists say. One of them is Schneider's successor at the Institute of Labour Studies, Alexander Spermann.

The labour policy expert has studied the basic income for years and points to pilot projects where participants did not become lethargic. "To the contrary: They suddenly tackle things that one would not have thought them capable of," says Spermann.

But Bohmeyer's crowdfunded project will not tell researchers much, Spermann cautions. One person does not make a representative sample and a scientific study would require observing a larger group of people over a longer period of time, he says.

Bohmeyer is undeterred. After the first €12,000 was raised, he said on his website that the first winner of the first basic income will be chosen soon.

"Now we are fundraising for a second one," he added.

SEE ALSO: Record number of Germans work two jobs

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WORKING IN GERMANY

Five things to know about salaries in Germany

Finding a job is typically a top priority when planning a move to Germany. The country boasts the third largest economy in the world and a continuing need for skilled professionals. 

Five things to know about salaries in Germany

If you are moving to Germany, you might soon start looking for a job in the country. However, like many other aspects of living abroad, there are several cultural differences and specificities when it comes to job hunting in Germany – especially when it comes to salaries.

Here are five things to know about salaries in Germany.

There is a minimum wage in Germany

Germany’s minimum wage of €12.41 per hour, pre-tax came into effect at the start of this year. This amounts to a monthly salary of €2,054 which ranks ninth in the world. The minimum wage will rise again in 2025 to €12.82 per hour before tax deductions.

There have been calls recently to hike the salary up higher to €14 per hour.

READ ALSO: Millions of workers in Germany ‘earning less than €14 per hour’

Find out salary expectations

Germany does not require companies to list salary ranges for listed positions. But that may be changing soon. The EU parliament passed a wage transparency law to require companies to publish annual reports detailing wage and wage discrepancy information. The rules, which are set to go into effect in 2027, are intended to help close the gender pay gap. 

In the meantime, employees can utilise online resources to find industry averages and expectations for different roles:

  • Gehalt.de offers users access to salary information on more than 800 professions
  • Online platform, Kununu provides compensation information and employer reviews to users in the DACH region  
  • Berlin residents can utilise REDSOFA’s salary survey for an overview of salary averages in the country’s capital city

As of April 2023 the average gross monthly salary was €4,323 according to Germany’s Federal Statistical Office.

Two-thirds of full time workers make less than this average monthly salary and one-third of workers earn more than this average monthly salary.

While wages after deductions may be less than similar roles in other countries, it is also important to take into consideration what other benefits come with a salary. Paid holiday leave, pension contributions, long notice periods and annual bonuses can help make up some of that difference. 

READ ALSO: How much do employees in Germany typically earn?

Check your payment schedule

Internationals can usually expect their salary once a month when working in Germany. Many German companies choose to pay employees either on the 1st or 15th of the month. It is also important to note that most employees can expect to receive their first pay check within 30 or 45 days of starting. 

For positions that offer yearly bonuses, these payments are included in a 13th pay check which are subject to income tax.  

A person works on a laptop.

A person works on a laptop. Image by Bartek Zakrzewski from Pixabay

How many hours do you work?

When looking for a job, don’t forget to check how many hours you can expect. Job descriptions will include expectations for time commitments. 

Mini-jobs, as expected from the name, are limited in hours and pay. Employees can expect up to €538 per month. Mini-jobs do not provide social security because they do not require social security contributions. Employees are also not automatically covered by health and nursing care insurance. 

Teilzeit, or part time jobs, are defined as any job where working hours are less than a full time position.

A common misconception is that part-time work requires working 20 hours or less a week. But an employee working five days a week for 30 hours, at a position that is typically 40 hours when full time can also be defined as a part time worker. 

READ ALSO: The rules in Germany around ‘mini’ and ‘midi jobs’

In fact, Germany has a term for workers who work between 28 and 36 hours a week. Vollzeitnahe Teilzeit, or nearly full time part time workers, can be a popular choice for some people, including parents. These positions can give employees more flexibility to balance work and family responsibilities. It is important to note that these workers are paid according to their time worked, so it will still amount to less than full time.

Depending on the work schedule, part time employees can earn the same amount of vacation as their full-time counterparts. That’s because holiday leave is calculated based on days worked, not hours. If a part time worker comes in five days a week, they will be eligible for at least 20 days of holiday. If that same part time worker comes in three days a week, they will be legally entitled to twelve days of vacation, even if they worked the same hours as the other employee. 

In most companies, weekly working hours between 35 and 40 hours are considered full-time employment or Vollzeitbeschäftigung

Watch out for the gross v. net difference

Before you sign the dotted line, it will be important to check how much of your gross salary you’ll be able to keep come pay day. Companies that include salary expectations in descriptions include gross salary (Bruttoeinkommen) – not the net income after taxes and deductions (Nettoeinkommen). The amount deducted will depend on how much you earn, the tax class you’re in and on other factors such as how much you’re paying for healthcare but it is usually around 40 percent. 

Salaried employees can find information on the deductions on their pay slip. Some to expect to see include:

  • Taxes are deducted directly from the gross pay. The amount is based on the tax bracket your salary falls within 
  • A percentage of your gross salary is also deducted for your pension / retirement contributions
  • Church taxes between eight and nine percent of your salary will also be due if you are affiliated with a religion
  • Unemployment insurance amounts to a 2.5 percent deduction from your gross salary. It is important to note that the insurance covers a salary up to €90,600 
  • Health insurance contribution rates are typically split between employers and employees. The rate depends on the provider. In 2024, the TK contribution rate to health insurance is 15.8 percent of the gross income

READ ALSO: What you need to know about your payslip in Germany 

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