Insight: The dark side of Germany's jobs miracle

Wed Feb 8, 2012 6:01am EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Sarah Marsh and Holger Hansen

STRALSUND, Germany (Reuters) - Anja has been scrubbing floors and washing dishes for two euros an hour over the past six years. She is bewildered when she sees newspapers hailing Germany's "job miracle."

"My company exploited me," says the 50-year-old, sitting in the kitchen of her small flat in the eastern German town of Stralsund. "If I could find something else, I'd be long gone."

Stralsund is an attractive seaside town but Anja, who preferred not to use her full name for fear of being fired, cannot afford the quaint cafes.

Wage restraint and labor market reforms have pushed the jobless rate down to a 20-year low, and the German model is often cited as an example for European nations seeking to cut unemployment and become more competitive.

But critics say the reforms that helped create jobs also broadened and entrenched the low-paid and temporary work sector, boosting wage inequality.

Labor office data show the low wage sector grew three times as fast as other employment in the five years to 2010, explaining why the "job miracle" has not prompted Germans to spend much more than they have in the past.

Pay in Germany, which has no nationwide minimum wage, can go well below one euro an hour, especially in the former communist east German states.

"I've had some people earning as little as 55 cents per hour," said Peter Huefken, the head of Stralsund's job agency, the first of its kind to sue employers for paying too little. He is encouraging other agencies to follow suit.   Continued...

 
<p>A worker controls the cast at a blast furnace of German steel manufacturer Salzgitter AG in Salzgitter March 24, 2010. REUTERS/Christian Charisius/Files</p>