Germany’s image is often of a prosperous country with autobahns chock-a-block with Mercedes and BMW cars. But for more than one million Germans, wages are so low they cannot get by without welfare.
The fate of the country’s 3.6 million unemployed (8.6 percent of the population) often figures prominently among the concerns of politicians.
But that of the working poor – a hairdresser earning €3 ($4.50) an hour, or a security guard earning €748 ($1,137) per month before tax – has long been ignored.
According to the federal employment agency, 1.2 million employees – half of them working full time – currently also qualify for welfare. In 2005, there were 880,000 of them.
Recently, amid a heated national debate about the pros and cons of introducing a national minimum wage, the popular press has started to decry the “breadline wages” paid to cleaners, shop workers or chambermaids.
But the working poor spans many different, often unexpected, professions and social groups, according to Karl Brenke, a sociologist and economist at the Institute for Economic Research (DIW).
“On the one hand there are family men, well integrated into the labour market, who earn about €9 ($13.60) an hour,” but whose income is boosted by government child support payments, he said.
“On the other hand, there are people in and out of work, who often combine unemployment pay with part time jobs,” mostly for very low wages, he added.
Many of these working poor live in the former communist eastern Germany, the country’s poorer region where social inequality runs rife.
According to a study released this week by the DIW, just over a quarter of all Germans now belong to the poor – those earning less than 70 percent of the yearly median wage of €16,000. In 2000, these accounted for just 18.9 percent of the working age population.
According to an OECD study, the gap between rich and poor grew more in Germany between 1995 and 2005 than nearly everywhere else in Europe. Only Poland and Hungary performed worse.
“We have very low wages in Germany. Compared to abroad, we are no longer where we thought we stood,” Labour Minister Olaf Scholz said recently.
More than 15 percent of workers earn less than €7.50 gross per hour, according to the minister, a Social Democrat, who favours a national minimum wage for all in a country where such deals are currently limited to certain regions or to specific job sectors.
Employers as well as many inside Chancellor Angela Merkel’s left-right coalition of conservative Christian Democrats and the centre-left Social Democrats, oppose such a plan for fear it could undermine job creation or even boost unemployment.
It is better, they suggest, to top up the wages of the working poor with government welfare than pay out more unemployment money.
Last month, the government announced it was multiplying by 2.5 the number of people entitled to child support.
Such a move, the tabloid-style Bild newspaper suggested, might actually backfire because it could prompt people on welfare to stay at home rather than go out to seek work.
Bild used the example of a family with two children where both parents worked, earning €1,500 net per month. If they didn’t work and applied for welfare, including a housing allowance, they would earn … €1,501 per month, the paper said.
“Anyone who works in these circumstances is an idiot,” the newspaper concluded.