Consequences
The immediate aftermath of the Agenda 2010 reforms was rather negative as unemployment soared to over 5.2 million people in February 2005 and Schröder called German companies "lazy" for failing to hire more workers . Beginning in 2005, however, unemployment figures have been falling and, in May 2007, unemployment was at 3.8 million people, a 5½ year low . The apparent success of Agenda 2010 in reducing unemployment in Germany has been cited in the debate over extending long-term unemployment insurance benefits in the United States.
A debate about the socioeconomic results of the Agenda 2010 reforms was stirred by the release of a study conducted by the Friedrich Ebert Foundation in late 2006. The study classified 4 percent of people living in West Germany as well as 20 percent of people living in East Germany as living in "precarious" socio-economic conditions. Although the topic of social conditions in Germany was much debated as a result of this study, with many people (including those in Schröder's own party) laying blame on Schröder and his Hartz IV reforms for a new economic inequality in Germany, no policy changes have been enacted as a direct result of the study . As of 2008, the wage ratio had been cut to a fifty-year-low of only 64.5%.
Another sign that economic inequality has risen in Germany can be seen in the fact that the number of Germans living below the poverty line has increased from 11% in 2001, to 13% in 2004, and about 18% in 2007. According to 2007 government statistics, one out of every six children was poor, a post-1960-record, with more than a third of all children poor in big cities like Berlin, Hamburg and Bremen.
Voters seemed to respond to the Agenda 2010 and Hartz IV reforms negatively. In the 2004 elections to the EU parliament, the SPD reached an all-time postwar national election low of only 21% of the votes.
The SPD lost by a wide margin in the 2005 regional election in its "heartland" of North-Rhine Westphalia; the regional government was replaced by a CDU-FDP coalition. The SPD losses were widely attributed to the voters' discontent with the Agenda 2010 reforms as workers and unemployed people defected from the SPD in droves. As a consequence, Chancellor Schröder admitted defeat and called for an early general election in the autumn of 2005, which was one year ahead of schedule
By 2011, unemployment had fallen from its 10% average of the mid-decade to around 7%, its lowest since the early 1990s.
Read more about this topic: Agenda 2010
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