With no national minimum wage and a fifth of workers in insecure mini-jobs, critics say German prosperity is being built on exploitation of the downtrodden
Going to the cinema or her local outdoor pool are treats Christa Rein can rarely afford. "I can't ever buy things like salmon or a bottle of sparkling wine," says the 55-year old. "The fridge can't break, as I wouldn't be able to afford to replace it."
It sounds like another story from Europe's desolate southern rim, squeezed by three years of austerity and recession. So it might come as a surprise to find that Rein's financial hardship comes from the centre of Europe's economic powerhouse. And that she is by no means alone.
As Angela Merkel leads her centre-right party towards crucial elections on a promise of economic recovery, sound financial stewardship and near-record employment, there is mounting dissent from a group that complains it is not sharing in Germany's much-vaunted wealth.
Radical reform to the jobs market launched a decade ago has left around a quarter of the workforce in low-paid, insecure and part-time employment, belying the impression of an economic miracle with a flawless jobs success story that has become the envy of the world.
Rein's take-home pay, for which she works eight-hour days for a cleaning contractor, is €1,079 (£922) a month. "I've been doing this for 30 years, and you're seeing all the time the way the workload has increased as the pay has decreased," she says. "Fewer of us are expected to clean more square metres in ever less time. We get 15 to 20 seconds to clean a toilet – that's not a toilet I'd like to sit on."
Meanwhile, the company employing her is earning more money, she says, "but it's not being passed on to us women". Rein, who lives in Braunschweig, argues the situation reflects that of the wider economy and will affect the way she chooses to vote in the elections on 22 September, which Merkel is widely tipped to win. "It's high time that ordinary German workers got to participate in the success of the economy," she says.
A survey for the European Central Bank in April showed that Germany's median net household worth was much lower than that of Greece. Looked at in terms of GDP per head, Germany is faring reasonably well. But contrary perhaps to popular belief, it is only just above the eurozone average.
According to the Institute for Employment Research (IAB), the research arm of the federal employment agency, 25% of all German workers earn less than €9.54 (£8.15) per hour. In Europe, only Lithuania has a higher percentage of low earners – that is, those earning less than two-thirds of the national average wage – than Germany.
The situation has fuelled a growing poor-rich divide as well as increasing resentment among those who see German prosperity being built on the exploitation of the downtrodden.
Daniel Kerekes, a 26-year-old student of history and religion at Bochum University, is among the one-fifth of Germans dependent on a so-called mini-job. "I work at a supermarket for around 16 hours per week for €7.50 an hour on a very restrictive contract," he says. "The shifts aren't guaranteed, and if I don't do everything my boss asks of me he can cut my shifts, or give me the worst ones."
With his earnings – in addition he earns a small amount working in digital journalism – he struggles to pay his bills, including the €280 monthly rent for his 36 sq m (387 sq ft) flat plus obligatory health and liability insurance payments.
Sometimes referred to as McJobs, mini-jobs are a form of marginal employment that allows workers to earn up to €450 a month free of tax. Introduced in 2003 by the then Social Democratic chancellor, Gerhard Schröder, as part of a wide-ranging labour market reform at a time when Germany's economic doldrums earned it the title "sick man of Europe", mini-jobs keep down labour costs and offer greater flexibility to employers.
But critics say they have helped expand the disparity between rich and poor and undermined many of the values that have traditionally underpinned Germany's envied social-market economy. Not only do they give employers no reason to turn them into proper jobs, but mini-jobs offer workers little incentive to work more because then they would have to pay tax. As a result, many remain trapped in marginal work and detached from Germany's much-hailed jobwunder, or jobs miracle.
Bochum, a poor city in the Ruhr valley, Germany's former industrialised heartland, is teeming with mini-jobs, according to Kerekes. "You can find these low-paid, precarious jobs on every corner," he says. "The woman living below me works on a mini-job basis in a discount supermarket, my girlfriend mini-jobs as a waitress – employers enjoy the fact that they can get you for just €450 a month."
Despite government claims that mini-jobs are on the wane – they fell by 0.6% last year – thanks to the success of Merkel's labour market policies, the opposition is quick to disagree. "These are questionable figures," said Anette Krame, labour market expert for the Social Democrats (SPD). "I don't think a 0.6% drop is reason to celebrate and neither do I recognise a trend in that direction." She cites the glaring omission in the statistics of recently introduced work contracts, which have been held responsible for wage dumping in several sectors, particularly the food industry.
Kerekes would like to see a new government abolish mini-jobs and introduce a minimum wage instead. "Mini-jobs are destroying ordinary work places," he says, "and for most people they do not provide a living wage. It can't be that even in the US most states have a minimum wage, and Germany, as one of the richest countries in the world, has none."
He is encouraged by the fact that the SPD say if they are elected they will introduce a minimum wage – of €8.50 – but he believes they are not going far enough. And anyway, they introduced the mini-jobs in the first place.
Statistics from Germany's employment agency show that at the top end German workers' wages rose by 25% between 1999 and 2010 while salaries in the lowest fifth rose by a mere 7.5%, in a period when inflation was 18%. That has led to what economists refer to as internal devaluation, significantly reducing their purchasing power and doing damage to the German economy.
Kerekes says his vote next month will go to the party he believes is doing most to tackle the McJob phenomenon. "I will vote for the Left party," he says, referring to the grouping of former East German communists and SPD rebels, "because they're the only ones pushing for a €10 minimum wage, which is the least you should be expected to be able to live on."
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