Black Market Could Swell by 25 Billion Euros if Germany Abolishes Mini-Jobs, Economist Warns
22.06.2026 - 02:21:45 | boerse-global.de
A leading economist has calculated that plans to phase out Germany’s mini?jobs could send at least 25 billion euros in undeclared work flooding into the shadow economy by 2027. Friedrich Schneider of the University of Linz argues that the narrow?margin employment scheme, introduced in the early 2000s, was one of the country’s most effective tools for curbing illegal labour. He estimates the current value of Germany’s shadow economy at roughly 500 billion euros per year — a figure that could jump significantly if the reforms go ahead.
The warning comes as a government?appointed pension commission prepares to hand a 30?point reform package to Chancellor Friedrich Merz and Labour Minister Bas on Wednesday. Among the most contentious proposals: restricting mini?jobs almost exclusively to school pupils, effectively ending the arrangement for millions of adult workers who rely on them to balance care duties or part?time study.
Retailers reacted with alarm. Stefan Genth, managing director of the German Retail Federation (HDE), called the plan a “dangerous wrong path” and said 800,000 jobs in the retail sector alone were at risk. Many employees, he argued, cannot switch to full?time or standard part?time work because of a lack of childcare. Scrapping mini?jobs would amount to a “fatal blow.” The hotel and restaurant association Dehoga echoed the criticism, warning that the restriction would hit its industry especially hard.
The labour movement itself is divided. Verdi chief Frank Werneke broadly welcomed the end of mini?jobs, noting they often lead to old?age poverty. But he strongly opposes other elements of the package, such as raising the retirement age. IG Metall has also signalled it will fight those parts of the reform.
Economists are split too. Monika Schnitzer praised the proposals, while fellow “wise economist” Veronika Grimm described the planned capital pillar as inadequate. DIW president Marcel Fratzscher cited a lack of consistency in tackling old?age poverty and accused the package of placing an unfair burden on younger generations.
What the pension reform package contains
Alongside the mini?job clampdown, the commission’s package includes:
- A gradual increase of the statutory retirement age to 68 by 2051
- Abolition of the “pension at 63” early?retirement option
- A new capital pillar: 2 % of gross wages, split equally between employees and employers
- Mandatory inclusion of self?employed people, politicians and civil servants in the public pension system
- A rise in the contribution rate to 19.9 % by 2028
Political reactions have been mixed. SPD co?chair Bärbel Bas called for transition periods and protection of existing entitlements. The Greens and the Left criticised the lack of guarantees for future pension levels — projections show the replacement rate could fall below 48 % as early as 2031.
