Belgium has already introduced measures to reduce undeclared work in household services.
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Undeclared work has reached a new high in Germany. It is an estimated 360 billion euros that were earned by the tax authorities in 2022. Dubious companies engage in wage dumping and tax evasion. This is a huge problem for reputable companies and for workers with little bargaining power – even in times when there is a shortage of skilled workers.
Nevertheless, some economists and financial scientists are currently justifying undeclared work in times of crisis: This could save people from slipping into poverty, says economist Friedrich Schneider, for example. In addition, undeclared work is an important form of additional economic value creation.
This line of argument is just as unconvincing as the justification for the supposedly “considerable” contribution made by people in mini-jobs to social value creation, who are often glorified as “helping hands in the house and garden”. What is concealed is that the contribution of these workers to the gross domestic product would be many times higher if they were subject to social security contributions and hired in their learned professions.
Resolute, value-based political action in line with the maxim propagated by the economist Mariana Mazzucato is not only required in construction: “The state must set the direction.”
Undeclared work is not a trivial offense. Not even in private households. And it’s not true that it doesn’t work without undeclared work. It is true that financial control has intensified its efforts in some sectors in recent years. So far, however, the black and gray mottled labor market in private households has been left out.
Until 2018, Uta Meier-Gräwe held the chair for private household economics and family science at the Justus Liebig University in Giessen and was an advisor to the federal government. Her current book with Ina Praetorius “Um-Care: How care work revolutionizes the economy” is partly based on the authors’ homo-oeconomicus columns in the Handelsblatt.
(Photo: Freiburg Equal Opportunities Office)
Undeclared work could be drastically reduced via the subsidies for household-related services, which were announced for the second time in the current coalition agreement but have not yet been introduced. Such grants have existed in Belgium since 2004.
>> Read here: What you should consider when working part-time in 2023
Regular domestic services, which have been in high demand throughout Germany for years, could be offered in good quality. Illegal employment could be avoided, as could poverty in old age among the mostly female service providers.
Between 2017 and 2019, the Federal Ministry for Family Affairs, the Ministry for Economic Affairs, Labor and Housing Baden-Württemberg and the Federal Employment Agency funded and accompanied such a voucher model with a total volume of 1.6 million euros under the name “Securing skilled workers via the professionalization of household-related services”. get evaluated.
Federal Labor Minister Hubertus Heil (SPD) should by no means listen to economists like Schneider, but rather orientate himself towards the impressive case-related cost-benefit analyzes of this model project.
More: High inflation is causing significantly more undeclared work in Germany – which, from the economists’ point of view, not only has disadvantages.