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In practice

SGE – a solidary basic income in Berlin, Germany

Summary

Berlin, Germany—

  • The solidary basic income pilot (SGE) by the State of Berlin, running from 2019 to 2025, combats long-term unemployment by providing permanent jobs in socially relevant activities and creating opportunities for career advancement and training for participants.

  • The SGE has received positive feedback from its participants, as the majority are happy with their job and willing to work in the same position for the next few years. All of the 1 000 funded positions are currently filled.

  • Ongoing evaluations will document if the programme proves successful in moving long-term unemployed people back into regular employment on a voluntary basis, and the degree to which the SGE pilot provides a viable alternative to unemployment benefits.

What are the objectives?

To combat long-term unemployment, the State of Berlin has launched a pilot project called “Solidary Basic Income” (SGE; Solidarisches Grundeinkommen), running from July 2019 to December 2025. The pilot offers people who are long-term unemployed a permanent job in a socially relevant activity as an alternative to receiving unemployment benefits. The aim is for participants to move into unsubsidized permanent employment and support their reintegration and advancement in the labour market and social participation, while also supporting work that creates value for the community more generally.

How does it work in practice?

As part of the pilot, 1 000 permanent jobs were created in local public administrations, public companies and social service providers. People who have been unemployed for one to three years were eligible for these jobs, which are paid at fair wage (minimum wage or wage set by collective bargaining agreements). Additional coaching and training are provided to programme participants to support their transition into non-subsidised employment. If they do not transition into unsubsidised employment, these jobs must serve the common good without displacing regular employment, for example by supporting the accessibility of public transport or day care centres.

Financial incentives and supports are also available for the employers. For example, coaching is available to support human resources staff in working with long-term unemployed. As a supplementary financial incentive for employers, the programme provides a bonus of EUR 2 500 for each SGE employee finding a job in the primary (i.e. unsubsidised) labour market.

What has been the impact?

The programmes 1 000 slots were filled by November 2020. The SGE is being closely studied and evaluated in order to provide insights for the State of Berlin's future labour market policy. A range of methods are being used, including surveys of both SGE employees and employers.

While the full impact of the programme is not yet known, the initial evaluation results provide some preliminary indications. The first evaluation report from 2021 suggests that most participants in the SGE programme have a positive view of their work and want to continue in the same position for the next few years. However, a small percentage left the programme, with the majority doing so at the employer's initiative (71%). Those who left mostly returned to unemployment (56%), while a few switched to non-subsidized employment or training (15%). The socio-demographic characteristics of those who left were similar to those who stayed. In 2023, the second evaluation report shows that the SGE project is already achieving some of its goals by relieving participants from job search pressure, enhancing motivation and commitment, and reducing dependence on government payments. Employers value SGE employees and aim to retain them. However, the project's effectiveness in integrating participants into the primary labour market is limited to date, with only a small number securing regular employment. For many employers, there is little incentive to hire employees before the end of the five-year pilot phase or to transfer them to other employers. Some employees also have little motivation to consider alternatives to employment in the SGE at an early stage.

What can other communities learn from this example?

Ongoing evaluations will document if the programme proves successful in moving long-term unemployed people back into regular employment on a voluntary basis. In the interim, initial learnings from the project further highlight potential pitfalls that other communities can learn from. For example, conflicting signals create confusion for both SGE employees and employers alike. On one hand, employees are encouraged to develop their personal and professional lives. However, due to the secure salary and promise of ongoing employment, some employees feel that they have already achieved their desired level of integration into regular employment, rather than being at the beginning of a developmental process. On the other hand, employers recognise that SGE employees add significant value that cannot be replaced with regular positions. Since SGE positions cannot be easily filled, employers are incentivised to retain their current employees for as long as possible, both to maintain financial support and to continue offering staff relief and additional services facilitated by the programme.

Further information

OECD resources

OECD (2022), Future-Proofing Adult Learning in Berlin, Germany, OECD Reviews on Local Job Creation, OECD Publishing, Paris, https://doi.org/10.1787/fdf38f60-en.

OECD (2018), "Fostering social inclusion in local labour markets", in Job Creation and Local Economic Development 2018: Preparing for the Future of Work, OECD Publishing, Paris, https://doi.org/10.1787/job_local_dev-2018-7-en.

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