ABSTRACT
This chapter outlines the traditional place of social welfare within the German constitution. It describes the radical Hartz reforms to Germany's system of social welfare, predate the global financial crisis of 2007. During the short period of the Weimar Republic, social rights were covered by the constitution, trade unions gained influence, unemployment insurance was introduced and local social democratic politics dealt with public health, families and housing. Germany's social welfare system was and is based on a current-disbursement principle, meaning that employees pay a certain percentage of their monthly income into the statutory health, care, unemployment and pension insurance funds by which they are insured under the respective laws. The centrepiece of the Hartz reforms was the introduction of 'activation policies', with the aim of pressuring the unemployed to re-integrate into the labour market as soon as possible. Germany had no statutory minimum wage before 2015 but focused on consensus-based negotiations under the principle of autonomy of wage bargaining.
