When Anahita Abdollahi starts her shift, she first checks her emails to make sure she’s up to date on all the library requests. The 26-year-old master’s student from Iran describes her job as a “part-time librarian” — she helps people find books they need for their studies, answers phone calls, and waters the plants.
Abdollahi says she likes “almost everything” about her job at the University of Cologne’s physics library — the only exception is the occasional tedious task, such as taking inventory of the library’s collection. But even that doesn’t bother her too much — after all, she only works twice a week for around five hours at a time.
This type of employment is known in Germany as a “minijob”, whichthe country’s government is considering eliminating in its current form.
Minijobs popular with women and students
A minijob is a form of part-time employment in Germany which pays a maximum of €603 (around $685) per month. As long as employees don’t earn more than this amount, they don’t have to pay social insurance contributions or income tax.
Minijobbers can also opt out of paying their share of pension contributions — and most of them do just that.
A minijobber typically works around 10 hours per week to reach the €603 cap, making it an ideal job for those with other commitments, such as students or stay-at-home parents. Women make up around 57% of all minijobbers, according to Germany’s central agency for minijobs.
The agency also estimates that nearly 7 million of Germany’s 45 million employees have a minijob. Some of them have it in addition to another job, while others have a minijob as their only form of employment.
Minijobs were introduced in the 1960s to facilitate low-level employment with little bureaucracy and to combat moonlighting. In 2003, they were redesigned as part of a comprehensive labor market reform.
They have long been criticized for reinforcing gender inequality in the job market, as minijobs are held disproportionately often by women, preventing them from building up substantial pensions.
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What are the benefits for employers?
Employers typically pay a flat tax of 2% on minijobbers’ wages, as well as social contributions amounting to around 30% of gross pay. Despite these additional costs, many businesses rely on minijobbers because they offer flexibility.
“There are operational situations where hiring someone only makes sense if the number of hours is truly minimal,” Holger Schäfer, a senior economist specializing in labor market economics at the German Economic Institute (IW), told DW.
Supermarkets, for example, need more cashiers on Saturday afternoons than they do on Monday mornings, making minijobs an easy way to fill the staffing gap. The extra weekend work is also why retail and hospitality are the two industries that employ the most minijobbers.
How could minijobs change?
In early July, Germany’s governing coalition announced its plans to raise the flat tax rate for minijobs from 2% to 5%. The government also stated its intention to fully implement the Pension Commission’s proposals, which were presented in late June and aim to ensure the sustainability of Germany’s pension system in the future.
One of these proposals focuses specifically on minijobs, and would eliminate the opt-out option for pension contributions and abolish the special status of minijobs. This would make minijobbers subject to regular social security contributions, effectively bringing an end to minijobs in their current form. According to the commission, this would strengthen social security systems, reduce the risk of poverty in old age, and address gender inequalities.
For Abdollahi, it could mean earning up to €130 less per month. The 26-year-old says she would probably try to increase her work hours to make up for the loss.
She could also get a research job that would require her to work for up to 20 hours per week, but this would considerably slow down the pace of her studies. “Even with my admittedly very chill job here, on the days I work, I usually don’t study,” Abdollahi explained.
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How is the proposal being received?
Many labor unions have welcomed the proposal, including Nahrung-Genuss-Gaststätten (NGG), a trade union representing workers in the food, beverage, catering, and hospitality industries.
“Minijobs have not proven to be a bridge to good employment; rather, they cement precarious working conditions for millions of people,” the NGG cited their chairman Guido Zeitler in a press statement.
Enzo Weber, a labor market expert from the Institute for Employment Research (IAB), believes the reform may encourage people to work more or pursue different career paths. It would “prevent people from getting stuck in the minijob trap” and “ensure that women’s career development doesn’t stall during child-rearing years, since they simply remain in low-paying jobs due to misguided tax incentives,” Weber told DW.
Business representatives, however, have pushed back against the proposed changes. “Abolishing minijobs would be a mistake,” argued Rainer Dulger, president of the Federal Association of German Employers’ Organizations, adding that minijobs help businesses remain flexible and tap into additional labor potential.
IW economist Schäfer, meanwhile, doubts that abolishing minijobs would encourage people to work significantly more hours. He also notes that a €600 job fully subject to social security contributions would generate rather small additional benefits. “It’s simply not worth it to set the entire social security machinery in motion for such employment relationships,” Schäfer said.
Still, he sees room for reform when it comes to people who take on a minijob alongside their primary employment. “We have an economic misallocation of resources when a skilled worker would rather deliver pizza after work than work overtime in their actual main job,” he explained. “But that doesn’t mean we have to abolish minijobs altogether.”
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Exemptions for university students?
The Pension Commission’s proposals also include an exemption for school students, which would allow them to continue working minijobs in their current form. Now, the Social Democratic Party (SPD) is considering whether this exemption could be extended to university students.
Abdollahi believes that would be the right decision. “They are one of the groups that need it the most, especially students from outside the EU,” she said.
Abdollahi’s own minijob at the library allowed her to enter the German labor market more easily and helped her improve her language skills. “It gives me a chance to practice German in a low-pressure environment,” she noted.
But Abdollahi and other students in Germany now have to wait to learn what will happen to minijobs, as the government is expected to debate the proposed changes later this year.
Edited by Rina Goldenberg
Sami Behbehani contributed to this report.
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