Atypical employment

The growth in atypical forms of employment is a long-term trend that has been observed from the 1990s to the mid 2000s: it is not simply a product of the easing of working regulations brought in by the Hartz reforms in the early 2000s. Since 2006, the share of atypical working relationships is more or less constant.

Atypical employment in Germany can be broken down into the following main categories:

  • regular part-time employment
  • marginal part-time work (‘minijobs’ paying up to 450€ per month)
  • fixed-term contracts
  • temporary agency work.

In absolute numbers, ‘regular’ part-time employment (other than minijobs) is the largest atypical form of employment. Its growth has not been as rapid as atypical forms of employment, but numbers have nevertheless risen steadily. The share of regular part-time employees (not counting marginal part-time employees) subject to social security contributions rose from 18.2 to 25.6 per cent between 2005 and 2013. This equates to an increase of 2.78 million people in ‘regular’ part-time work. Almost 90 per cent of part-time employees are female with a vocational or academic qualification.

At 7-8 per cent of paid employment, the share of fixed-term contracts remained stable over the last decade. Since 2011 this share has dropped slightly, by 0.2 percentage points. Fixed-term contracts are often used as an extension to a trial period and can play a key role in entry into professional life. Fixed-term contracts are found more often amongst new recruitments and in the public sector. A high proportion of fixed-term contracts are held by people with low qualifications; but also amongst university graduates.

The number of “marginal” part-time employees rose considerably in the years after the Hartz reforms (after 2005). While the number of people exclusively engaged in marginal part-time employment has remained almost constant since 2005 at just over 5 million, the number of people engaged in marginal part-time work as a second job continued to rise distinctly between 2005 and 2013 from 1.5 million to 2.4 million. Among those marginally employed in part-time work, young people (under 25), older people (above 55), women, and people with low qualifications are disproportionally represented.

According to the long-term trend, both temporary agency work and marginal part-time work have increased fourfold since German reunification and, are therefore the forms of employment with the highest growth rates. More recently, however, this rapid growth seems to have eased. After a clear drop during the financial crisis of 2009, temporary agency work slightly decreased again after 2011.

Temporary agency work has always been defined by fluctuating, comparatively short durations of employment. Between 2000 and 2012, the duration of a temp job was an average of three months. However this differs according to qualifications: temporary agency workers with a university-level qualification were employed with an agency for the longest period: for 5 months on average. In general, a slight trend towards longer periods of employment is apparent in the sector. In 2000, 21.6 per cent of temporary agency workers were employed for more than 9 months; in 2010, this rose to 27.6 per Cent.

Atypical working relationships in a European comparison

Atypical forms of employment such as part-time employment, temporary agency work, or self-employed sole traders are on the increase, not only in Germany but in Europe as a whole.

Here, we compare six EU countries – Germany, France, Sweden, the United Kingdom, Spain and Greece. For all countries, part-time employment has increased since 2005. At 26 per cent, the share of part-time employment is highest in Germany and the United Kingdom, closely followed by Sweden at 25 per cent. In contrast, the share of part-time employment in comparison to total employment in Greece lies at 8 per cent – currently well below the EU28-average of 20 per cent. However, at 37 per cent, Greece shows the strongest growth in this form of employment, followed by Germany at 23 per cent.

Family commitments, such as looking after children or caring for relatives, are central motives for taking up a part-time activity in Germany, the United Kingdom and France. By contrast, in those countries badly hit by the financial crisis such as Greece and Spain, people take up part-time work because they cannot find a full-time job.

The highest shares of part-time work are amongst lone parents and couples with children. In those German and British households where childcare is cited as an essential motive for taking up part-time rather than full-time employment, the share of part-time employment is far above the EU28-average. In Sweden and France, by contrast, there are hardly any noticeable differences between the various household constellations. In Greece and Spain, the share of part-time employment is clearly below the EU-average across all types of households.

On average, the number of fixed-term contracts across the EU has remained constant since 2005. However, France, Sweden and the United Kingdom report agrowth of between 8 and 17 per cent. In Germany, fixed-term employment increased slightly up to 2010 and has since been on the decline. Strong declines of almost 40 per cent in the number of employees with fixed-term contracts are evident in Spain and Greece. In those countries, workers with fixed-term contracts bore the brunt of the adjustment to the financial crisis.

By European comparison, the United Kingdom, Germany and France have the highest number of temporary agency workers, both in absolute numbers and in relative terms. At 3 per cent, the United Kingdom has the highest share of temporary agency workers, followed by Germany and France, each at 2 per cent. Amongst the other countries considered here, the share lies at 1 per cent or less

Low-wage earners

In Germany, atypical working relationships are particularly prevalent in relation to low-paid work. Here, even a permanent full-time position does not necessarily guarantee a sufficient living wage; nor does it guarantee protection from redundancy.

Almost a quarter of all employees in Germany earned a low wage in 2012 and the preceding years, that is, less than two-thirds of the median wage. Thus, the inequality within the lower half of the wage distribution is larger in Germany than in most other EU countries.

When only full-time employees are taken into account, the share of low-wage earners in Germany is somewhat lower, but still high in relative Terms. By international standards, women, young people, those with low qualifications, fixed-term employees and foreign workers are overrepresented amongst those with low wages.

In Germany, it is it is above all women and part-time employees who find themselves in the group of low-wage earners. However, male workers who are in permanent employment and hold a vocational training qualification are also prevalent amongst low earners, despite belonging to the “regular” labour market. Over the long-term an increase in employment has been accompanied by an increase in wage inequality in Germany.

Low wages and unstable employment can lock people into poor-quality jobs over the long term. For this reason, it is important to improve the quality of employment at the lower end of the labour market – and thus aid upward mobility in work – without making it difficult for people to take up jobs at the lowest end of the pay scale. Here the legal minimum wage introduced in 2015 could make a difference, although it is currently too early to assess its longer-term impacts. In addition, it is crucial to increase the career-advancement opportunities for people in atypical working relationships and low-paid jobs, especially through on-the-job- or part-time training