The current debate in Germany on extending the low-wage sector turns primarily on labour market policy considerations. This contribution, on the other hand, focuses on the social and social-policy challenges thrown down by a low-wage strategy. The problem levels and the arenas for social-policy action are discussed, initially considering fundamnetal issues, but then moving on to look at the approches to the problem taken by various European countries. The second section focuses on the subsidisation of social security contributions, an approach that has recently been the subject of particularly intense debate in Germany, and is to be tried out in pilot projects at regional level. As is clearly shown by the discussion of two leading concepts taken from the debate in Germany, proposals made under the same "label" may differ considerably from one another in terms of their premises, their financial resource requirementes and their distributive effects.
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