The study finds that, across household types and regions, a person on the statutory minimum wage ends up with more disposable income than a Bürgergeld recipient once you include supplements tied to work (like housing support, child benefits, etc.). Three illustrative cases show a single person on minimum wage edging out Bürgergeld by a substantial margin, a lone mother with a child also netting more in work than in Bürgergeld, and a two-earner couple with a child facing a noticeable shortfall under Bürgergeld. Housing costs are treated heterogeneously in the calculations, and the analysis emphasizes that the real problem is not lack of willingness to work but insufficient income combined with high housing costs. Regional differences track housing prices, with the smallest gaps in some high-cost urban districts and the largest gaps in cheaper rural or less prosperous districts. The authors argue for policy focus on affordable housing and skills development rather than simply raising benefit levels, noting that political proposals emphasize work-first reforms alongside the notion that work remains financially advantageous.
From a libertarian perspective, three pillars illuminate why this result should be read as a critique of state redistribution and a defense of individual freedom and market coordination:
Nozick on rights and coercive transfers: A society should respect individual property rights and voluntary exchange, not compel productive people to fund others through taxation for welfare. Bürgergeld, as a government redistribution program, systematically infringes on the rights of those who produce to fund others. A minimal state’s proper function is to defend contracts and rights, not to engineer income by coercive transfer. If some people fall on hard times, the moral and legal solution is voluntary charity and private mutual aid, not compulsory wealth transfer backed by the coercive power of the state. The study’s implication—that work should be rewarded and housing costs addressed—rings true, but the remedy lies in freeing voluntary exchange, not expanding bureaucratic entitlements.
Hayek on knowledge, prices, and regional variation: The study’s geographic differences reflect a larger knowledge problem: policymakers cannot centrally anticipate and price every local housing market, wage dynamic, or skill need. Distorting signals with a universal Bürgergeld dampens the incentives and information created by genuine market prices. A freer housing and labor market—less zoning manipulation, fewer licensing frictions, and fewer distortive subsidies—would transmit local price signals more accurately, allocate housing to where demand truly exists, and encourage efficient investment in skills and mobility. In short, the misallocation risk grows when the state attempts to micromanage welfare and housing through flat-rate rules and subsidies.
Rand on virtue and voluntary association: A society that relies on coercive redistribution erodes personal responsibility and the moral atmosphere of voluntary exchange. The right to keep what you earn includes the right to decide whom you help and by what means, without forced wealth transfer. Welfare programs cultivate dependency and resentment, whereas private charity and voluntary support channels align with a rational, productive ethic. The comparison in the study is a reminder that relief should come through voluntary, value-creating exchange, not through coercion claiming to compensate for market failures.
Policy implications and libertarian counterproposals
End or sharply limit Bürgergeld: Replace coercive transfers with a framework that preserves individual rights and minimizes state coercion. A truly free society would rely on voluntary charity, private insurance, and market-provided safety nets, funded by those who choose to participate, rather than by universal taxation and redistribution.
Deregulate and liberalize housing and labor markets to alleviate rent burden and raise supply: Abolish or scale back zoning restrictions, rent controls, and licensing obstacles that artificially push up housing prices. Expand secure property rights and reduce regulatory capture by local authorities, enabling more construction, relocation, and competition among housing providers. A more vibrant private housing market would better reflect local willingness to pay and reduce the need for public subsidies in the first place.
Restore competitive wage signals and skill formation through voluntary means: Let training, apprenticeship, and private education markets respond to demand rather than through centralized benefit regimes. Encourage freedom of contract in the labor market, support portability of skills, and remove paternalistic barriers that shield workers from the consequences of market signals. If help is necessary, it should be offered by voluntary associations and charitable organizations rather than by compulsion via taxpayers.
Emphasize moral economy—private philanthropy over redistribution: The Randian ideal of rational self-interest pursued through productive work and voluntary aid, rather than coercive redistribution, should guide policy discourse. Encourage a culture where success is earned and aid to the needy comes from voluntary contributions and accountable private channels, not from redistributive programs that undermine initiative and trust.
In sum, the study exposes that, under current arrangements, compulsory state welfare can fail to outperform the outcomes produced by work once housing and regional realities are considered. A libertarian response is to shrink or abolish such coercive programs, unleash market forces in housing and work, and elevate voluntary, private mechanisms of aid and risk-sharing. Freedom, not redistribution, should shape the path to prosperity and dignity for all.