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Berlin startup offers a year with no money worries

Miko from Berlin may only be five, but he already has €1,000 ($1,063) per month to live on - not from hard graft, but as part of an experiment into universal basic income.

Berlin startup offers a year with no money worries
Michael Bohmeyer, the founder of Mein Grundeinkommen (My Basic Income). Photo: DPA
He is one of 85 people, including around 10 children, chosen by startup Mein Grundeinkommen (My Basic Income) to receive the payments for a year since 2014.
   
Founder Michael Bohmeyer has set out to prove to a sceptical public in Germany and further afield that the universal basic income (UBI) idea is workable.
   
“Thanks to my first startup, I got a regular income, my life became more creative and healthy. So I wanted to launch a social experiment,” 31-year-old Bohmeyer told AFP.
   
And he wasn't alone in wanting to test the idea, as some 55,000 donors have stumped up the cash for the payments in a “crowdfunding” model – with the final recipients picked out in a “wheel of fortune” event livestreamed online.
   
Mother Birgit Kaulfuss said little Miko “can't really understand, but for the whole family it was exhilarating” when he was chosen — offering a chance to live “in a more relaxed way” and take a first-ever family holiday.
 
Trying things out 
   
“Everyone sleeps more soundly and no one become a layabout,” Bohmeyer said of his beneficiaries.
   
Recipients' experiences range from a welcome spell without financial worries to major turning points in their lives.
   
“Without day-to-day pressures, you can be more creative and try things out,” Valerie Rupp told public broadcaster ARD in a recent interview.
   
She was able both to take care of her baby and start a career as a decorator — even as her husband, newly arrived from Mali, was taking German lessons.
   
Winners have left jobs that were doing little more for them than put bread on the table to become teachers, taken time out to address chronic illness, broken alcohol addiction, taken care of loved ones, or paid for children's studies.
   
“It's at once a gift and a prompt” to make a change, explained Astrid Lobeyer, who used the money to give eulogies at funerals and studied the therapeutic Alexander technique, a method for relieving stress in the muscles.
   
Bohmeyer's experiment has fascinated social media and boosted discussion about a universal income in Germany.
   
At the same time, Finland is testing the idea with 2,000 homeless recipients and the idea is a flagship policy for French Socialist presidential candidate Benoit Hamon.
 
Reward for laziness? 
 
In 2009, the German parliament flatly rejected a petition from some 50,000 Germans demanding a universal income.
   
Nevertheless, some 40 percent of the public still think it's a good idea, according to a survey last June by pollsters Emnid.
   
Supporters have formed a campaign group called “Buendnis Grundeinkommen” (Basic income federation) with their sights on September's legislative elections, but so far no major party has taken up the cause.
   
There are pockets of support among left-wingers, the right, Catholic organisations and even industry leaders, whose reasoning ranges from fighting poverty to simplifying bureaucracy or smoothing the transition into the digital era.
  
Resistance to the idea is more focused, centering on how UBI would change people's relationship to work.
   
Right-wingers dismiss it as a “reward for laziness”, while the Social Democratic Party (SPD) worried in 2006 about unemployed recipients being “labelled useless” rather than getting help to find jobs.
   
Meanwhile, major unions like IG Metall and Verdi denounce the idea as a “liberal Trojan horse” that would “boost inequality” by paying millionaires and poor people alike.
 
Thankless jobs
 
Mein Grundeinkommen is “poorly thought out” as a response to broader social questions, University of Freiburg economist Alexander Spermann told AFP.
   
The startup's 20 employees eat up “60 percent of the budget”, founder Michael Bohmeyer admits — while the idea of basing the funding on curiosity or activism by thousands of donors is hardly applicable on a large scale.
   
For Spermann, the Berliners' experiment has only succeeded in answering the question “what would I do with a blank cheque if I got one for Christmas?”
   
People's choices in terms of qualifications or work if they were guaranteed the payments for life are the real mystery, the economist argues.
   
“Who will take on the exhausting and sometimes less attractive tasks, like emptying bins or taking care of the elderly?” asked Werner Eichhorst of the Bonn Centre for the Future of Work (IZA) in 2013.
   
UBI supporters argue such jobs would either be taken over by robots or find a new place of honour in society if the policy were enacted.
   
“No machine will take over working for us and pay our taxes at the same time,” Eichhorst and opponents shoot back.
For members

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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