‘You just can’t win’
Manuela Schneider, 40, who is unemployed, volunteers at the Berliner Tafel, a charity that donates food to the city’s poor. Here, at the organization’s Neukölln branch, she helps people select fruits, vegetables and other necessities: “It is better than sitting at home,” she says.
How the working poor in Germany are trying to make ends meet – By Jabeen Bhatti
Berlin cab driver, Arnie, spends his days cruising the city, searching for fares. He says he works nights and weekends as much as he can to earn more even though it means less time with his kids. And although he works full-time, he has trouble making ends meet for his family of four: A wife who works occasionally when she can find it, and two children.
“I am lucky if I can clear €1,500 after taxes a month,” said Arnie, (real name changed at his request). “But it is hard and there is no room for extras.”
He is relatively new to the ranks of cab drivers, he says, pointing at his colleagues parked at a taxi stand in Berlin. He explains that he left his job as a public bus driver four years ago and never looked back. “That was worse,” he said. “Then, I worked a night job part-time as a security guard after my driving shifts. My salary was just not enough. But I never saw my kids.”
Arnie is one of the legions of the working poor, underemployed or unemployed in Germany, numbering more than 10 million in a total labor force of 43 million out of a population of 82 million in 2010, according to the federal government. Despite a booming economy over the past year, and a shortage of skilled labor in some areas in the country, some regions such as Berlin in the east have been left behind – underemployment is rampant and unemployment in the capital hovered around double the national rate of 7.4 percent in January.
In Germany, 3.1 million people are currently unemployed and half of these fall into the long-term unemployed category. But more telling are the numbers for low-paid work known as “mini-jobs” or “one-euro jobs” in which people can earn up to €400 without losing their welfare benefits or paying taxes: 7.3 million Germans worked these jobs in 2010.
There are a number of reasons for this structural unemployment and underemployment, say analysts, who attribute it partly to historical developments when industry moved West after World War II and mostly remained there. In general, skilled workers in manufacturing, the export industries and parts of the white-collar sector are doing well. But it is in the service sector where things start to look grim, partly because of low wages but also because employers find ways to dodge hiring full-time employees to elude stringent laws on firing them.
“The reason why a salesclerk at Schlecker has it hard is because their work contracts are set up so that only the supervisor is full time,” said Achim Neumann, a Ver.di union official who represents workers at the discount chains such as Schlecker (drugstores). “There are only two workers allowed per store who work a maximum of 20 hours each earning between €7 to €13 per hour. Most workers don’t earn enough because of the cap on hours they are allowed to work.”
One employee at a Schlecker’s in the Kreuzberg district of Berlin tried to look on the bright side. “I’m just lucky that they will give me set shifts,” said the employee, who declined to be named. “I work at another discount store on my off days to earn more.”
Freelance and temp work is also common in this sector, including for new graduates just entering the labor market. One young graduate of political science, 25, from just outside Berlin, has been trying to get a job for a year, she says. She works at a catering job some evenings and weekends to pay the rent while trying to get her foot in the door, somewhere.
“I am sick of internships, I have done six of them,” she said. “That is all people want to hire me for, it seems, cheap labor. Then my few months are up, and I am shown the door and a new intern comes in. It is really disheartening. But it is the same for a lot of my friends.”
Experts say that it is these temp jobs, internships and low-paid part-time work that fill the space that used to be reserved for full-time employees in Germany these days.
“The working poor are a new, more recent phenomenon,” said Ralf Wilke, a professor of economics at Britain’s University of Nottingham, who specializes in Hartz IV issues. “It was virtually non-existent in the 1980s. Then, even people working (in the lowest paid jobs) could have a nice flat and paradise.”
And the nature of the relationship between employer and employee has changed over the past decade, say analysts.
“People in Germany no longer stay with one job or one company their entire lives as before,” said Olaf Hahl, CEO of Berlin-based Context, an organization that offers job training programs to the unemployed around the country. “Today, due to a highly competitive market, part-time jobs and badly paid jobs are becoming more common.”
On top of that, the German economy over the past 15 years has been marked by wage restraints, according to Fabian Lindner, an economist with the union-affiliated Hans Böckler Foundation, a research institute. He says that wages have risen slower than productivity would actually have allowed for. As a result, capital returns increased as a percentage of GDP while wage income decreased. That development has been good for the current export-led economic boom but not for the economy as a whole – the biggest share of GDP is still the domestic market.
“This lack of wage pressure in Germany has been a great advantage to the export industry as goods could be sold cheaper abroad,” Lindner said. “But in the past 10 years, there has been a huge expansion of precarious employment, a very big increase in the low-wage sector. However, wages also determine consumer purchasing power. So in Germany, we had a big problem in that the domestic market was stagnating because people didn’t have enough money in their pockets to purchase goods and services. That has all contributed to weak growth.”
Many say that wages won’t rise until the government pushes for that via a minimum wage. Economists say it isn’t clear that a minimum wage, which would likely be low, would help many of the working poor in Germany. It certainly won’t help those currently unemployed and dropping further behind the longer they stay that way. Scholars say that it is these people who pay the real price for the changes in the wage and employment structure in Germany.
Manuela Schneider, 40, a health care worker with three children, has been unemployed since 2006. She has been looking for work for years but she says it isn’t easy. “It isn’t only about finding a job, it is about finding a job that is suitable for a woman who is raising three kids alone,” she said. “All the jobs I applied for or got referred to expect me to do night shifts. How can I go work at a nightshift when I have a 7-year old at home?”
So she makes do with the €1,307 a month she gets in benefits for herself and her children, actually €300 for food and necessities after fixed expenses. Most of her time is spent battling the bureaucracy and mountains of paperwork at the Job Center, both to keep her benefits and to get extra ones for her kids, as well as hours pouring over the Internet to find more.
“You have to find out what benefits and extra stipends there are yourself,” she said. “Nobody tells you about them and sometimes the civil servants sitting there don’t know either because they just started working there after being on Hartz IV themselves. And I sometimes spend around 20 hours a week at the Job Center: There is so much paper work, so much you have to appear for and fight for that it is a full-time job.”
Still, if she were to get a job, say analysts, she would likely not earn more than she gets in benefits now. But benefits being equal or only slightly lower than wages are disincentives found throughout the system.
Michael, 49, who asked that his last name not be used, is a university graduate on Hartz IV benefits since 2008. He has worked on and off again, most recently in the “one-euro jobs” through which he can earn up to €100 tax-free a month before losing his benefits. He says he has made his peace with his situation.
“Being stuck in the Hartz IV system does something to you and after a while you become sedated, passive,” he said. He says it is too late for him now: “Once you are out as long as I have been it is impossible to get back in.”
Others are trying desperately to get back in but are finding few opportunities. Nüket, 50, who asked that her last name not be used, worked as an accountant for 15 years before losing her job more than a year ago. Now, she is about to lose her unemployment benefits. “The blackboards at Context and at the Employment Agency are filled with the €400-a-month jobs as receptionists at hotels, or in call centers. These aren’t jobs (suitable) for me.”
And some long for days gone by. Michael Courant, who initially trained as a toolmaker, 62, works as a caregiver at a center for the elderly in a one-euro job. “Back in the day, one used to say that it was the king of metalwork jobs – it was the best paid.” He later went to study mechanical engineering and then worked as a technical manager at a machines company until it went bankrupt shortly after the fall of the Berlin Wall. “After reunification, (potential employers) told me, I was overqualified,” he said. “So I tried to develop other skills. Now they say I am too old. You just can’t win.”