Exploitation of Workers: Barbers Accused as Fall Guy in Race Discrimination
In a bid to combat financial crime and tax evasion, the German government has introduced a new law focused on black work in the hairdressing and cosmetics industry. The Finance Minister, Lars Klingbeil, presented this legislation in response to growing concerns about financial irregularities.
The new law, which specifically targets barbershops, nail salons, and cosmetics salons, is expected to have a significant impact on these businesses. This move comes as a result of the high instances of undeclared work found in these sectors, which are more readily addressable by targeted controls compared to other industries.
However, the focus on the hairdressing and cosmetics industry has raised eyebrows and sparked criticism. Some argue that the construction industry, which has a higher prevalence of black work and exploitation despite fewer controls, is being overlooked. The construction sector, particularly, is a significant employer of immigrants, making it a prime target for black work.
The criticism suggests that the Finance Minister's policy is stigmatizing and amounts to scapegoat politics. In 2024, 1350 criminal proceedings were initiated in the hairdressing and cosmetics industry, but the construction sector's issues with black work and exploitation remain unaddressed.
The government, however, defends its decision, stating that the focus on the hairdressing and cosmetics sector reflects sector-specific enforcement pragmatism and the relative accessibility of combating undeclared activities there. The construction sector's low level of controls remains a recognized issue, but addressing it may require long-term reforms beyond immediate enforcement.
The shadow economy in Germany, which makes up over 11% of the total economic output and is valued at hundreds of billions of euros annually, poses a significant challenge to the government. The new law against black work is part of an effort to reduce this figure and potentially bring significant financial gains to the state.
References:
[1] Schneider, Friedrich. "The Size and Structure of the Shadow Economy in Germany." Centre for the Study of Economic Mobility, 2021.
The government's new law, targeting the hairdressing and cosmetics industry, is a response to financial irregularities, part of an endeavor to curb the shadow economy that poses a significant challenge. Critics argue this policy is stigmatizing and overlooks the construction sector, a significant employer of immigrants and a prime target for black work, but long-term reforms, not immediate enforcement, might be required to address its issues. The construction sector, construction industry, and politics are interconnected with the challenges of black work and the need for reforms, while the Finance Minister's policy and general-news stories focus on the hairdressing and cosmetics business sector.
