A still divided city
By Matthias Benz, economics correspondent for the Neue Zürcher Zeitung (NZZ) in Berlin
Business doesn’t play a big role in Berlin. But a recent announcement that the city had become Germany’s growth champion was the source of much pride. And it is true: In the last five years, no German state has upped its economic performance like Berlin, according to figures from the DIW economic institute. Regional output increased by an average of 1.7 percent annually, double the rate in the rest of Germany. Some 150,000 new jobs have been created since 2005. So is it time for the capital to drop its unofficial “Poor but Sexy” slogan, once coined by Mayor Klaus Wowereit?
Not quite. There are still a lot of people in Berlin like Simone. The single mother works several jobs in an effort to make ends meet. She teaches yoga classes in various studios throughout the city, she waitresses in a cafe and late at night, when her kid is in bed, she bakes cakes to be sold the next day in the cafe. Actually, Simone is an actor but you won’t see her face much on the TV or the big screen.
There are also a lot more people like Tom in Berlin these days: In his mid-thirties, dark suit and tie, he was sitting opposite me in the cafeteria of a federal ministry. Tom secured a good job in the ministry after finishing his doctorate and looks set to work his way up the career ladder. He doesn’t need to worry about his material existence. Thinking about how he can make his mark on Germany’s still strongly hierarchical bureaucracy is probably a more pressing concern.
Berlin has caught up economically but it remains a city divided – not by the Wall but by the divide running through its labor market. On the one side stands the legion of actors, scriptwriters and other “creatives” who are just about making ends meet, freelancers living off meager hourly rates with no social benefits. They walk the tightrope between bohemianism and the breadline. Not a few of them are dependent on top-up welfare payments.
On the other side is the army of ministerial civil servants, lobbyists, parliamentary aides and university employees, who work well-paid secure jobs and don’t need to worry where their money will come from if they fall ill or when they retire. If they are civil servants they truly have no need to worry: few groups in Germany are so privileged.
So Berlin’s economic boom – as positive as it is – isn’t quite what it appears to be. The mass of welfare recipients (almost one fifth of the population) have had little share in the upswing. Often they lack the necessary qualifications for the new jobs. In recent years, the tourism industry has blossomed, as have the self-employed sector and business-related services like advertising. But most jobs growth has been in the health and human services sector, an area overwhelmingly financed by the state or the big social insurance agencies.
That means that Berlin is still heavily dependent on government funds. During the Cold War, the city was mollycoddled with subsidies from West Germany. The move of the federal capital from Bonn to Berlin has only reinforced that dependency. The business of government and parliament brings the money here, gradually it trickles down again until at some point it reaches the creatives and the cafe workers. Berlin is still hooked up to the drip feed of public money.