Germany is well known for its fast cars Audi, BMW, MERCEDES, VW. It is well known for its efficiency and the Germans call people like Albert Einstein or Johann Wolfgang Goethe their own. When Germany re-united in 1989, when good triumphed over evil, finally the world recognised the Germans as Europeans with a strong sense of community rather than the evil race of Neo-Nazis. In the last few years the economy of Germany reached rock bottom. 5 million people are unemployed and the future looks grim. Everybody hopes that the new government, led by the first ever female chancellor Angela Merkel, brings change and prosperity, I spoke to two gentlemen just recently. One is an employer and one is an unemployed person and both have their say here and now:
Interview with Markus Anbau, East Germany, Employer, self employed
TJ:Are you self employed as well as employing people?
M:Yes, but I only have casual workers, there is not enough work for full time employment, well, the costs are just too expensive. There is enough work alright but you have to earn the money first before you can pay what you can or what you would like to pay towards employees. That’s exactly the point and the problem. The non-wage labour costs are simply too high in Germany.
TJ:Can you explain the non-wage labour costs?
M:It is mainly the health insurance, social insurance, costs towards retirement insurance; in my opinion the worst of it all is the health insurance
TJ:So, you have to pay too much money towards the health insurance for the people you are employing.
M:That’s correct. And retirement insurance are the biggest bulk.
TJ:Are there talks between employment associations and those groups?
M:They are talking for years but there is only little outcome. They are planning a 3% VAT increase. 2% are planned to decrease employment insurance but that’s simply not enough. It is only beneficial to the big companies and they aren’t doing anything for Germany anyway.
TJ:What do you mean by that?
M:They have plenty of options to channel taxes in Germany, for instance, profits go abroad and losses stay in Germany. They have completely different options to misuse the system. We have a relatively complicated tax system and that creates opportunities to find a niche for misuse, that’s one of the reasons to get rid of some subventions which is generally speaking a good idea.
They created a system in Germany and allowed unlimited subventions rather than limiting them and reviewing them from time to time. Those are undesirable developments that can’t be undone and which cost the state dearly.
TJ:Can you briefly describe the business you are running and what you are doing exactly?
M:Well, what do I do? Basically I am an event organiser. You know if you have no skills you become an event organiser (laughing)
TJ: “Wer nix wird, wird Wirt” (German proverb) – “he who has no clue end up as a bartender” as they say in Germany
M:I am organising special markets like craft fairs and ceramic arts fairs, that sort of thing. Markets where art gets displayed.
TJ:So it is something special directed towards a special audience?
M:Definitely, yes. You know that people don’t have much money especially in the East, Saxony stop, and many people just watch there money and quality is secondary. So they buy a lot of foreign works. My markets offer unique handmade crafts from Germany, by German artists. That’s one way to do something for Germany.
Even if it is only a small thing. The craft is dying actually.
TJ:O.K., it is a family business you are running, isn’t it, it wasn’t formed by you, it was originally formed by your father, right?
M:I created the business. Well, my parents worked in this area before I did. My mother passed away as you know,
TJ:Yes, you told me
M:You know how it is in Germany, bureaucracy and formalities is everything, so it was more useful, legally, to put the old business to rest and start afresh when my mother passed on.
TJ:But you are working in a field of which you know a lot about.
M:Yes.
TJ:I should explain to our listeners that we know each other, you worked over here in Ireland, we are mates and that you returned to Germany. What I often notice when we talk over the phone is that you are not happy
M:No.
TJ:Why is that? What do you think has to happen to boost prosperity?
M:That’s exactly the point. It wasn’t always like this in Germany. Well, discipline, Order, efficiency and all that always played a major role and that made the nation big. Sometimes too big as we all know.
But it got out of hand nowadays there is too much bureaucracy, there are too many formalities and it is not about justice and the right or wrong of things. That’s only of minor importance and therefore the society is pretty cold and the pressure for the people is simply too high. It just makes the people sick.It is all too stiff especially because of the economic situation.
And because of the Western influences, American influences, all that matters is money.
TJ:You mentioned that it is worth where you are, in the East, and I am only mentioning it because you did, is it better in the West financially because you said that the people in the East have no money.
M:There is more money there, certainly. Just recently there was a statistic shown on TV, I saw that in the early 90s already …
TJ:Maybe it’s the same one (humour)
M:One person in Deutsch Marks ... the income on average in the old counties was around€ 3000, only half of it in the East.
That’s the comparison in Euro obviously and it has only changed minimally. The general purchasing power is simply lower. Some say that the wages are lower, but the costs of living for example are extremely high, especially in Saxony stop. More expensive than in the West in comparison and you simply can’t make sense of it.
Gasoline is more expensive, food is more expensive, rent is more expensive and so on.
TJ:So, are people still leaving?
M:Saxony stop has lost almost 800 000 people since 1990. At least since there are statistics. It could have been more. 1989 is a grey area because of the escape to Hungary.
TJ:So, the feeling really is that it is still a divided country?
M:It usually takes a generation
TJ:We are nearly there time wise.
M:Well, I wouldn’t say it that critically but it certainly needs time in certain areas. Also because people here suffer a lot but cuts in social services affect the people in West Germany evenly.The effects are just more prominent here.
There are simply no jobs and it is very difficult to give work to the people. People just make less money in the East. Why did BMW go to Leipzig; simply because it is cheaper and it is real competition for the people who worked for BMW in the old counties. The value of money is lower. The huge companies do not feel it that strongly because they operate globally.
TJ:The new government – does it help you in any way?
M:Well, I think if we are not able to turn things around now then where will be something else coming afterwards, something nobody wants, if there is to be a collapse, radical mindset will emerge, leftwing or rightwing doesn’t matter, radical is always bad.
TJ:Agreed. Do you think it is avoidable?
M:Yes, I think so. The big coalition has got the power to change things.
There were things going wrong in the last 40 years, you know, we have the Federal Council of Germany and the Parliament and the Federal council has to approve 2/3 of what the Parliament is coming up with, which means that the governments capacity to act is very limited.
The federal council gets controlled by whoever has got the most votes in the numerous counties and for years it was the CDU (Christian Democratic Party).
The SPD (social democratic party of Germany/former government) followed a politic that was right in many ways but not very popular, even though many people do not wish to be reminded of it. They basically lost all the state elections.
In Politics, and that’s the case everywhere, there is a lot of bad mouthing going on and see how stupid you can make your opponent look. If Germany gets sacrificed in the process is not important. And that’s the politics that were happening especially the new government and Angela Merkel played a big role in this.
TJ:O.K., now it is her time to govern.
M:Yes, she is in power. But she can’t continue badmouthing. She has got some leadership skills and the main advantage now is that the CDU must discontinue its old ways because they are the government and they cannot badmouth themselves.
Apart from that the social democratic party is government as well which has advantages. They have the majority of votes in comparison to the opponent parties and they have to be constructive now They have acknowledged how bad the situation is economically.
TJ:They have to pull the same strings
M:They just have to. There is no two ways about it. They are clever enough to see that this will be the end of democracy.TJ:You are observing the market meticulously. What’s your prognosis? Is it getting better some when?M:Yes, but it takes time.
The tax reforms regarding corporate intent have been postponed to 2008. That’s another two years although I have to say that we as entrepreneurs do not need another tax reduction. It doesn’t really help us. The finance ministers know that. They know exactly what comes into the budget and what goes out. The main bulks are tax on wages and turnover tax.
Turnover tax reached around 136 Milliards in 2004 and tax on wages around 126 milliards or something like that and if you have a budget of approximately 300 milliards so if you acquit somewhat it doesn’t hurt the government at all but it doesn’t help companies either. So if you increase taxes by 3 % than you make money on the other hand it doesn’t really work because it decreases the head to head purchasing power.
You have to create options so that companies can employ people.
Formerly they just punished and now they are trying to create economic incentives
TJ:Thanks my friend
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Interview with Michael (surname does not matter), unemployed, 42 years of age
TJ:What I would like to know is your background, perhaps the last 10 to 15 years of your work and how you slipped into unemployment so that our listeners can understand how one slips from a good education and a good job into unemployment and doesn’t get enough support from the government.
M:Basically, that is pretty easy. You always work towards a bigger goal within a company for years and years and makes financial adjustments and then something happens like in my case in April 2004 when I got fired because of the economic situation within a small company. And there you are, totally unprepared for cases like this.
TJ:you’ve got kids?
M:Three
TJ:In which case it is difficult anyway to save money for a case like this.
M:When you have a family of five people and no extraordinary additional means it is always difficult to survive in any way. It’s a fact in my case that the difference between the unemployment benefits and what I earned prior to being unemployed every single months is €700 net and one has to …
TJ:Compensate
M:Compensate and that is simply not possible. And then there are things and costs left and right that you cannot pay any longer which causes additional problems. I was unemployed for 6 months and there was absolutely nothing happening for me, absolutely nothing. I wrote 80 to 90 applications and the answer always was: “You are too old, too expensive” and if they wanted to be polite: “You are overqualified”.
TJ:Too expensive means that you cannot survive on the same wages as a 20 year old with no family for instance?
M: It is not so much that I wanted to get the same wages because I had earned very good money, even when you make sacrifices from 3,4, 500 €, which is 600 Deutsch Marks even if the Deutsch Mark doesn’t exist anymore, even then you find yourself on a level where nobody takes you on because employers want you to work your way up to good wages and these games like, “alright, I take a job where I earn € 1000 less” or something like that, can be played when you are 25 but not when you are 42 and you have family.
TJ: Obviously, when you received so many negative replies, it wasn’t an option anyway in most cases.
M: In many cases the option wasn’t that companies say: “O.K., lets get this guy and see what he has to offer and perhaps pay him what we deem appropriate”.
TJ:Just to explain this to our listeners, it needs to be said that you are living in the greater Frankfurt area, where, in comparison to Northern Germany for instance, the possibilities to find employment aren’t as bad.
M:That’s absolutely correct. Because this is congested urban area that is certainly true but you don’t have too many means to look for jobs. There is your own initiative of course, which is very important, where you spend the whole day just driving around and thinking “what is it I would like to do”, where you simply walk into companies, leaving your CV. It is very time consuming and is very unlikely to happen often. The other thing is the newspaper and the Internet.
The Internet is not everybody’s pair of boots because this is a platform where you have to reveal very much of yourself and where you very often don’t know where the data is ending up, so you have to be careful. Newspapers offer in the region of 6 to 700 jobs whereas you used to find around 1200 on the weekends edition, so there are jobs obviously, but you have to be a certified engineer, a certified such and such or you are some sort of a low level type …
TJ:Hang on, just to set the record straight, you have a wealth of skills and over 20 years of experience as a clerk in a certain area
M:I have 26 years work experience, 10 years alone of the Frankfurt airport where I worked for a car rental company with international customers, with English and service commitments, with a certain level of stress and so on.
5 years work in a hotel and always in the area of trading.
TJ:So you build on your experiences.
M:Yes, I am no job hopper in the classic sense because I always worked within the same industry, the last jobs were always long-standing jobs and I am certainly what they call a good standard profile meaning: good English, good manners, Microsoft office package and all that even though that seems to be a pre requisite nowadays.
TJ:Where is the bottom line in Germany, when are you too old? Like when you are over 35 then it is almost useless.
M:The employment agency sets that border. The job agencies tell you nowadays that they can merely help you once you are 35 and over
TJ:And what do they offer as alternatives?
M:I honestly have to say that they do a lot. The employment agencies have long abandoned their old, cold, and long – floor buildings, with hour long waiting time. A completely new form of agencies emerged in modern office communication centres divided, and I can only speak fro Frankfurt, divided into North, South, West and East and I belong to the South for instance.
There are kind of large offices, where you can use all of the print media. You can use computers after scheduling an appointment. Someone approaches you personally by name and introduces himself and takes you to the workstation.
New application centres are emerging where you can register free of charge and for three months you can use those facilities between 8 a.m. and 5 p.m., you can use their computers, check your emails, there is no restrictions to any sites or anything like that, one would mainly use it for applications and checking out job offers, you also find competent personnel there who help you with writing your covering letters and so on. Then they have a partner – service in Frankfurt where you have 4 passport pictures taken, they transfer them onto CDs which means that you only pay 4 passport pictures and for any further application they print your picture straight onto your sheet.
They pay your stamps and all that. So they do a lot.
TJ:How many unemployed people are there in Germany at present?
M:5 Million. That’s a difficult thing because within this number of 5 million is a high number of long-term unemployed.
TJ:And I reckon that “dark figure” of unemployment is higher. By all accounts there seem to be a high number of people who are involved in occupational retraining and they are not counted as being unemployed?
M:That’s nice to hear that, nobody ever offered me occupational retraining even after asking and re-asking because the budget isn’t there. Retraining often is a double edged sword; on the one hand there is a lot of arbitrariness involved where an advisor may says: “No problem – at least you have a job” whereas others might say that you learn three years and then you are 45 years of age and are even more unlikely to get a job.
TJ:And which one is the more realistic statement? The first one or the second one?
M:The third one actually where someone says that no one knows what the future looks like and that they have approved three retraining sessions this year and there might not be any next year.The other problem after combining unemployment benefits II and social welfare.
TJ:I don’t know if you have got enough information on this but could you explain this to us because when I left Germany 5 ½ years ago there was a social welfare office in existence and employment agencies and things like priority benefits and you had to go from A to B. Is it true that there are no social welfare offices anymore?
M:No, there still is a social welfare office but the principle of unemployment with unemployment benefits I: meaning entitlement of payment for one year, if I haven’t been able to secure employment within a year I am entitled to receive II for another year.
TJ:Unemployment benefits II - Does that mean less money?
M:Yes, formerly you were entitled to unemployment benefits and then so called unemployment help, which got less gradually or on a percentage basis. And when unemployment help is over then you have to ask for additional allowances. Then Peter Hartz came into the picture
TJ:Hence the name. Hartz IV
M:A government advisor whose job was, for a substantial amount of money, whose job was to set a program in motion which aimed for securing employment for people and to hit those who rested on the pillars of the security nets provided by unemployment benefits hence Hartz IV was born.
And Hartz IV says:· Unemployed – 1 year: unemployment benefits 1· After one year – automatically Harzt IVM: Hartz IV means combined. Im ny case it is plain simple.
In my case it means as a sum: Married with three kids, € 1500 unemployment benefits for a year, if I haven’t been able to secure employment within the space of a year; I am automatically getting Hartz IV. Which means € 254 for me…
TJ:So they don’t only punish those who …
M:They are not getting punished anyway because the social welfare offices still exist and the people who new earlier how to get new coffee machines and washing machines and new toaster and all that are still there.
TJ:Can you just repeat the figures because I interrupted you there?
M:In my case I would be getting € 254 across the board, which means that I am loosing nearly € 1200 and then you get a flat amount for the kids and it is simply not enough money thereby you would be forced to go to the social welfare office and say that you are a Hartz IV receiver which automatically means that you receive social welfare and as appellant you have to go from one office to another and you have to say for instance: “ I need an allowance towards rent” or “I need warm clothes for my kids”.
TJ:The same way it has always been with the social welfare office.
M:Only that the criteria have changed because you aren’t allowed things like: “What do you mean, your wife has a part-time job” or “you have a car, then you cannot be needy” and all that. Basically you really have to be very poor in order to get any allowances.
TJ:What has to happen to change course? I mean, is there hope?
M:There were a lot of political decisions in this but the problem concerning work in Germany is that both small businesses as well as big established companies are declaring themselves insolvent because not because there is no money but because Germany as a location of industry has become too expensive.
The non-wage labour costs are too high and the state makes a lot of money with what gets paid as wages, we all know that, but it is also clear that every employer has to include all the money he pays towards wages into the retail prices of his product and many people say it is no longer profitable in Germany to produce. Earlier they closed down departments where thirty employees where affected but nowadays entire businesses get closed down and there are up to 10 000 people all of a sudden out of job.
And production will continue in the East like Hungary or the Czech Republic.
TJ: The new government, is it of any use for the regular folks?
M:That remains to be seen. The government is only new. A new broom sweeps clean as they sayTJ:What are the expectations? What do people want?
M:They have to kick-start the economy. There needs to be a boost, there needs to be social fairness. There are terms circling the air like: “Rich man taxes” and all that. I am no politician, I am a man who is firmly rooted who has kids who are entitled to a decent education and I think it is just not on if I stand my ground here on a daily basis, paying taxes and working, and all that, I have the right to be looked after properly when I am sick and that my children can do learn and do whatever they want and I don’t want to see it happening that somebody says: “You can’t do this because your father hasn’t got enough money”.
It can’t be right that education is only for the privileged and by now this is almost how it is. Tuition fees and all that, we cold go about it for two hours. Fact is that the expectations of the people regarding the new government are an improvement of the situation because it can’t get any worse.
Thanks guys for the interviews and all the best for the future
Total length: 23.41minutes
