For all its
economic success, Germany has a growing problem with inequality and poverty,
and yet Chancellor Angela Merkel seems to be deflecting the blame so far as
the
battlelines are drawn for elections in September.
Renowned for
its highly-skilled workforce, Germany has in fact a greater proportion of
working poor - people who have a job but are struggling with poverty - than
Britain, France and even some less wealthy EU states such as Hungary or Cyprus.
Nowhere is the
widening gap between rich and poor more evident than in the Ruhr region, an
urban sprawl of five million people that was once the center of Germany's heavy
industry.
A highway that
plows through the western region is nicknamed the "social equator",
separating suburbs hit by the decline of coal mining and steelmaking from those
that have benefited from the new industries that now power German growth.
To the north,
soup kitchens and food banks tend to the unemployed, homeless and refugees as
well as the working poor. To the south, highly qualified workers drive luxury
cars to glass buildings housing high-tech and pharmaceutical companies.
Sensing an
opportunity to beat the conservative chancellor on Sept. 24, the center-left
Social Democrats (SPD) are trying to mobilize disgruntled Germans. "Many
people fear that their pension won't be enough, the rent can't be paid, or that
their children will be permanently on limited job contracts," SPD deputy
chairman Ralf Stegner told Reuters.
But
recapturing these voters, many of them once SPD loyalists, is proving tough
going.
North
Rhine-Westphalia, home to the divided Ruhr region and where poverty has risen
more than in any of Germany's 16 other states, should be fertile ground for the
message. Likewise, pensioner Edith Rena, 75, would seem an obvious target
voter.
"I worked
for 40 years and raised two children alone," Rena said, resting on her
trolley packed with fruit and vegetables bought at a discount at a food bank in
Dortmund, the Ruhr's largest city. "I come here because it's cheap so I
can save money to buy presents for my grandchildren."
Rena has
received welfare support since retiring 10 years ago from a department store
sales job as her 620 euro ($675) monthly state pension doesn't cover her living
expenses and rent.
Along with the
working poor, the number of pensioners seeking welfare has almost doubled over
the past decade, and the SPD are seizing on this to counter the conservatives'
insistence that Germans have never had it so good.
And yet
Merkel's message that economic growth is steady, unemployment is at a record
low and falling, and state finances are sound appears to be resonating more
with voters like Rena.
She vents her
frustration not at the chancellor, who has led Germany for more than 11 years,
but at the SPD which enacted labor market and welfare reforms in the mid-2000s,
badly hurting its own traditional working class supporters.
"Of
course I'm going to vote for Merkel," she told Reuters. "We've done
well under her. Why would I vote for a party that abandoned the poor?"
ROBIN HOOD
The German
Institute for Economic Research has found that while the economy grew 22
percent in real terms in 1991-2014, the poorest 10 percent of households saw
their real disposable income shrink by 8 percent. By contrast, income for the
richest 10 percent rose about 27 percent.
Despite its
image as a nation of well-paid workers making world class goods like Mercedes
cars or Siemens kitchen equipment, Germany does not show up well in
international comparisons.
The proportion
of employed Germans threatened by poverty, which means their disposable income
is less than 60 percent of the median national wage, was slightly above the
European Union average in 2015, according to the EU statistics agency Eurostat.
The figure was
9.7 percent of the workforce compared with only 8.2 percent for Britain, which
since the 1980s has embraced free-market reforms more vigorously than Germany.
The rate was 7.5 percent in France, 9.3 in Hungary and 9.1 in Cyprus.
After naming
Martin Schulz as its leader in January, the SPD surged in opinion polls to
catch up with Merkel's conservatives, propelled by promises to make German
society more equal. Media nicknamed him "Robin Hood", after the
legendary English outlaw who robbed the rich and gave to the poor.
However, while
the election is set to be tightly contested, the conservatives have reopened a
lead in recent polls with about 35 percent support, around five points ahead of
the SPD, now the junior partner in Merkel's coalition.
Schulz, a
former European Parliament president, is promising to undo some of the
"Agenda 2010" reforms enacted by his own party under then chancellor
Gerhard Schroeder over a decade ago.
These helped
to end a long period of stagnation and high unemployment by making the economy
more competitive, turning Germany from the "sick man of Europe" into
a powerhouse.
But Agenda
2010 also increased the number of low-paid and part-time workers who now face a
higher risk of falling into poverty during their active years or after
retirement.
The SPD paid a
heavy political price, losing a significant section of its working class
support base and three successive elections to the conservatives starting in
2005. So it is Merkel who reaped the political benefit of the reforms, leaving
the SPD to regain the trust now of alienated Germans.
"Through
the theme of social justice, the SPD is trying to remobilize its lost support
base, to bring non-voters back to the ballot box," said Prof. Robert
Vehrkamp of the Bertelsmann Foundation, a non-profit think tank. This could be
decisive for the party's chances of victory, he added.
Schulz wants
to quadruple to a maximum of 48 months the period that people who become
redundant can claim unemployment benefits if they attend vocational training,
and to curb employers' right to offer workers limited contracts.
His party has
also pledged to increase inheritance and wealth taxes and use the funds to help
families with nursery and after-school care costs, as well as raising pensions.
Not everyone
is receptive. "Schulz talks a lot. But I would like to see him find me a
job suitable for my age and health," said Manfred Mueller, a 56-year-old
former construction worker who has been unemployed for 15 years after injuring
his back.
"Agenda
2010 was a catastrophe," said Mueller, a former SPD voter who has backed
the hard-left Linke party since 2005. He believes Schulz will face resistance
from employers warning of job cuts if he tries to make the labor market more
rigid.
"The only
job I could do is sit in an office," said Mueller, dunking a bread roll in
his soup bowl at the Kana Soup Kitchen in Dortmund. "But I am not sure
even this would work. I'm a trained builder."
POPULIST
THREAT
Merkel's
Christian Democrats (CDU) and their Bavarian allies say Schulz's plans would
harm competitiveness and reverse falling unemployment which, at 5.8 percent, is
at its lowest since German reunification in 1990. "Since 2005 we have
managed to halve unemployment. And we want to bring more people into the labor
market," CDU Secretary General Peter Tauber told Reuters. "What
Schulz is proposing threatens this success."
The
conservatives are promising tax cuts of 15 billion euros a year that would
mainly benefit middle-income households.
Despite the
discontent, Germans are not rejecting their long-established parties, unlike in
France. Nevertheless, the conservatives and SPD must contend with the far-right
Alternative for Germany (AfD). In regional elections last year, both lost
support to the AfD which attracted protest voters, many of them blue-collar
workers and the unemployed.
Beset by
infighting, the AfD's support has fallen by a third since the start of the year
to 10 percent but it is still expected to enter parliament for the first time,
possibly as the third-largest party ahead of the Linke, Greens and revived
liberal Free Democrats.
That would
raise the number of groups in parliament to six from four at the moment,
complicating the task of coalition building for whoever wins in September.
*Reuters*
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