I can’t get a handle on the meaning of this word. Is it Yiddish for “penis” or for “worthless/unclean” or “foreskin?” Or all or some of the above?
And what about Putz? Y. for small penis? or just the end of one?
Schmuck is Yiddish for jewels…it’s slang for the testicles, and, by association, a jerk. The word for unclean you’re thinking of, if you’re referring to physical dirt, not ritual uncleanliness, is probably “schmutz”. Putz means a penis.
Ah, at last-- a domain I have some expertise in: “What is a schmuck?”
Literally, it’s a penis, but I’ve rarely if ever heard it used in a clinical sense. Lenny Bruce said the dictionary meaning is “a yard, a fool” (I think those are synonyms, though “yard” must be pretty archaic: “Hey, you yards, get out of my yard” is one I’ve never heard), but it’s more intense than that. Again Lenny Bruce defended it against the charge of obscenity by citing the phrase “Me, like a schmuck” (said in response to a question like “Who sat up all night listening to that boring and dopey argument?” “Me, like a schmuck”); he claimed that the only person who would use the expression to mean “Me like a penis” would be (and I quote) “a faggot Indian, maybe.”
Think of it as an intensive form of “jerk.” In fact, I move that we change the SDMB rule to “Don’t be a schmuck.” Seconded?
Schmuck is German for jewelry or finery. (I recall being a bit taken aback by seeing a large sign on a main street in Switzerland that proclaimed Christ Schmuck, until I realized it was a jewlry store owned by a man whose last name was Christ.) It has a figurative meaning in Yiddish of penis (a man’s “ornament”) and by extension “fool, idiot, jerk.”
Similarly, “putz” in German means ornamentation or finery, but in Yiddish it means penis, and by extension fool, idiot, or jerk.
I have a photo of that sign in Munich, that I took when I was there in the '80s! 
In my high school German class, one of the dialogs was ‘Wir putzen das Auto’ – ‘We’re washing the car’.
My sign was in St. Gallen, Switzerland, but you can find Schmuck in stores all over the German-speaking world, I’m sure. 
No, as pseudotriton ruber ruber said, it means a penis and can also mean a jerk.
Perhaps you’re confusing the German schmuck which literally means “ornament or jewelry.” But it doesn’t mean that in Yiddish.
BTW, the term in Yiddish, at least in the old days, was so offensive that you NEVER said it when women or children were around, just as in English I would have been embarassed in the presence of my mother or father to call someone a “prick or a dick” in the 1950’s-60’s.
And, BTW, the “jerk” meaning can have both a whimsical (he’s a boob) meaning, and an (he’s a SOB) obscene meaning.
To show you the boob meaning, I’ll paraphrase my all-time Leo Rosten favorite (Joy’s of Yiddish) story.
Mr. Bernstein was an over-65 widower living a lonely existance in Miami Beach. He noticed that another widower who lived in his apartment was always in the company of friends and beautiful women. So he finally asked the fellow one day in the elevator of the apartment “What’s your secret?”
The fellow replied, “I used to be like you. But I got myself a camel and rode it every day up and down Collins Blvd. Pretty soon people got to know me, stopped me to talk, and it was all great from there.”
So, Bernstein bought himself a camel, rode it every day up and down the blvd. for weeks, but nothing happened. One morning he went out to get his camel, and it was gone!. He called the police. The officer filled out a report, asking Bernstein to describe the camel…“how tall?----six feet” “what color?-----brown” “how many humps?—two” "male or female?----I don’t know,…wait! it was a male.
The cop says “you weren’t too sure, but now you are. Howcome?”
Because every day as I rode the camel up and down the blvd, people would point at us and say “Look at the shmuck on that camel.”
:::::loud groans or guffaws:::::: Your choice.
I’ll be here all week. Remember to tip your server.
And the Yiddish is shmuck while the German is schmuck.
According to Leo Rosten’s ‘The Joys of Yiddish’:
Rosten states that neither term is to be used in the presence of women or children, owing to the vulgar nature of both terms, but claims that while shmuck “may be used in a teasing or affectionate way, vulgar though it is…
putz has a pejorative ambience.”