Social Welfare Advocate Bärbel Bas Warns of Prevalence of Social Fraud - Is Her Concern Justified? - Social advocate Barbel Bas is expressing concerns about financial deceptions in society. Is her warning justified?
By Jim McAllister*** + - 2 Mins
In an exclusive interview with Der Spiegel, newly appointed Federal Minister of Labor Barbara Bas reveals her plans to combat black work and social fraud, describing elaborate criminal structures enticing workers from across Europe to Germany. She claims these individuals are tricked into working black while simultaneously claiming citizens' benefits. "These are organized crime syndicates that we must root out," Bas asserted.
Bas draws attention to her hometown of Duisburg, commenting on the prevalence of social benefit fraud in certain districts. The Hochheide district, in particular, is home to four high-rise buildings known as the "White Giants," where widespread social fraud is reported. Der Spiegel consulted with two experts to shed light on Bas' claims.
"Bas Hits the Nail on the Head"
According to Gerhard Bosch, an emeritus professor at the University of Duisburg-Essen and an expert on black work, "Barbara Bas is spot on. In certain Duisburg neighborhoods, in specific buildings, and on specific streets, massive social security fraud is taking place." This includes instances where child benefits are claimed for non-existent children.
Bosch agrees with Bas on the issue of black work. "In the past, we had small-scale black work. That is, work without a receipt during weekends on construction sites, with neighbors, in villages. This type has been replaced by organized crime syndicates. These are systematic fraud rings, and they are, indeed, mafia-like structures."
Black work is funded through fake invoices, Bosch explains. "Companies receive cash for services or materials not rendered from other criminals. Sometimes, this cash exchange happens at motorway service stations."
The Financial Control of Black Work maintains a list of 6,000 companies that issue these fraudulent invoices. Annually, approximately 200,000 black workers are detected.
Information Exchange Key to Fighting Social Fraud
Michael Rüscher, head of security and order at the city of Duisburg, echoes Bas' concerns in an interview with Der Spiegel. "The idea behind the EU's freedom of movement should not be manipulated to lure Europeans to Duisburg for the sole purpose of exploiting social benefits," Rüscher argues.
Rüscher, who is part of Duisburg's taskforce on social benefit fraud and leads raids in the "White Giants," expresses support for Bas' initiatives. "It's encouraging to see that there are now federal-level plans to address this issue," he comments.
Improved information exchange between authorities would be a crucial step in curbing social benefit fraud, Rüscher suggests.
The State of Black Work in Germany
In 2024, it's estimated that at least 3.3 million people were working black in Germany, with the actual number likely to be significantly higher, as indicated by the Working Group on Financial Control of Black Work. Their estimates suggest up to 10 million people could be engaging in black work.
The financial extent of the shadow economy, to which black work contributes significantly, is forecasted to reach approximately 511 billion euros in 2025, accounting for around 12 percent of GDP. Sectors such as construction, catering, cleaning, and care are particularly affected, along with widespread private services like unrecorded handiwork.
Black work not only hurts the economy and the state; it also causes substantial financial losses for companies, estimated to be around 300 billion euros in annual sales, as well as missed tax and social security contributions.
Read more about the trends and proposed solutions to combat black work and social benefit fraud in Germany by delving into the enrichment data provided below.
Enrichment Data:
Overall:Currently, several measures are being proposed or implemented in Germany to enhance information exchange between authorities to combat social benefit fraud and illegal work, often referred to as "black work" or "Schwarzarbeit." Some measures and trends in Germany include:
- Data Exchange Platforms: Developing centralized data exchange platforms for effective information sharing between various government agencies.
- Collaboration and Coordination: Strengthening collaboration and coordination between federal, state, and local authorities.
- Digitization: Increasing digitization to reduce bureaucracy and improve transaction traceability, aiding in the detection of irregularities.
- Legal Adjustments: Proposing legal adjustments to expand the powers of authorities in accessing and sharing relevant data.
- Public Awareness Campaigns: Launching public awareness campaigns to educate citizens about the negative impacts of black work and social benefit fraud.
- Use of AI and Analytics: Leveraging AI and data analytics to detect patterns and anomalies that may indicate fraud, thus facilitating proactive detection and prevention.
- Cross-Border Cooperation: Enhancing cooperation with neighboring countries to combat cross-border fraud.
These measures are part of broader efforts to strengthen the legal framework and improve enforcement capabilities in Germany. The specific proposals from local leaders like Michael Rüscher would likely build upon these strategies, focusing on practical implementation and addressing the unique challenges faced by cities such as Duisburg.
- The community policy proposed by Federal Minister of Labor Barbara Bas focuses on combating black work and social fraud, aligning with the policy-and-legislation category.
- The crime-and-justice sector intersects with the issue of black work and social fraud, particularly in the context of organized crime syndicates reported by Barbara Bas.
