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Monday, 10 September 2012

Crisis leads to more and more low wage workers in Germany: every one in five workers earns less than €10.36 ($13.15) per hour.

Sometimes you read small news articles in the newspapers that can have a very big impact eventually.

Today, the German daily newspaper Die Zeit wrote on the rising amount of people in Germany that is working for a very low wage: to 20.6% in 2010 from 18.7% in 2006. In the article a very low wage is defined as: ‘a wage of less than two/third of an average wage’. The threshold amount for a very low wage is €10.36 or $13.15. Here are the most important snips of the article in German, translated to English by me.

Part-time jobs, temporary contracts, mini jobs (i.e. jobs that earn about €400 per month): the share of the very low wage workers has risen again. This is the continuation of a long-term trend, according to experts.

In Germany one in every five workers is working in the low wage zone. According to the German statistical bureau Destatis, the number of low wage workers has risen lightly: in 2010 20.6% of all workers in companies with 10+ workers worked for a very low wage, in 2006 this number was still 18.7%. Smaller companies were left out of the equasion: when these would have been included, the amount would be even higher.

A very low wage is defined as a wage of less than two/third of the average wage of all workers. According to the statistical bureau, the threshold lies at €10.36 in 2010.

A reason for this development, according to the statistical bureau,  is the long-term rise of ‘a-typical jobs’: most are part-time workers with less than 20 working hours per week, workers with a temporary contract and people with a so-called ‘mini job’. Of these mini job workers almost 50% earned less than the €10.36 threshold amount. Among the part-time workers the share of very low wage workers was even 84%. From the temporary workers with more than 20 contract hours per week, the number is 11%.

Especially among the following jobs the percentage of low wage workers was very high: taxi drivers (87%), hairdressers (86%) and professional cleaners (82%). Also in hotels and cinemas, the amount of very low wage workers was high: respectively 77% and 74%.

The statisticians investigated also whether workers with a very low wage invested part of their income in a personal pension plan: only 6% did so, against 22% of the workers with an average wage and 36% of the workers with a high wage.

This increase in low wage-jobs in Germany is the logical result of liberation and ‘marketisation” of the labor market, in combination with open borders in times of economic crisis. When there are no minimal wages and there are plenty of people applying for a job, the wages go down.

When there are ample workers available from countries like Bulgaria and Romania where even the German very low wages are much higher than the domestic wages, the wages go even further down: eventually to a level that even the poorest worker considers unacceptable.

Concerning the very low wages, this kind of development can lead to poor, working people that need more than one job per day to live their lives at a minimum standard.  Children that have mothers and fathers in such jobs are deprived of their parents, as these have to work extra hours every day to make ends meet. These children often don’t receive basic needs, like food, clothing and shoes, school materials and a little bit of pocket money. Especially German people without a proper education could become victims of this development.

Everybody that saw the situation in cities like Flint, Michigan and Detroit in the famous Michael Moore documentary ‘Bowling for Columbine’ will know what I’m talking about.

The situation for the foreign workers in Germany that come from the European low-wage countries can be just as desperate: while the German, very low wages still could mean ‘a fortune’ at home for the Bulgarian and Romanian workers, they also have to pay the German prices for  food products and daily consumption articles when they live in Germany. Their wages are often too low for proper housing and good nutrition, especially as some employers abuse the awkward situation of these workers far away from home and in a vulnerable position.

This is the reason that these people are often victims of slum landlords and sometimes even modern slavery, of which we had some grim examples in The Netherlands.

The only way to stop this development in times of economic crisis is to set a minimum wage for all jobs, that is applicable for people from all countries within Europe and beyond.

Everybody that thinks of this as being the first step towards communism, should consider that minimum wages are of paramount importance to maintain the social cohesion in a country. Loss of social cohesion could eventually mean social unrest and violence in the streets. And that’s the last thing we need in these trying times.


  1. There is a tree-tops perception in the US media that German workers have highly skilled jobs, only requiring 35 hours a week and liberal yearly vacations. A veritable workers' paradise.
    True enough for some but not all, as you point out. Down-trending demographics being what they are in Germany and other countries in Europe the scut work still has to be done, and tellingly enough it's being done by immigrants. I wonder how many of these low-wage jobs are done under the table.
    While we don't share the same opinion on minimum wages, I agree that desperate people do desperate things in trying times.
    (came to this blog via Mynianville, by the way. Good stuff)

  2. Hi Andrew, Thank you for your kind reaction.

    It is true that the vacations in Europe are longer and "more liberal", but you should wonder how Germany manages to build some of the best products in the world, if everybody is only having long holidays. People there are working 'hard 'n smart' and their feeling of quality is second to none.

    Especially the industrial area around the river Ruhr (i.e. the Ruhr-gebiet)can be very well compared with the Pittsburgh area in Pennsylvania. There is a lot of heavy industry (Krupp, Thyssen and many other industries)and a lot of dirty work to be done.

    This is heavy and sometimes even unhealthy work and for this reason it is often done by immigrants. When these people would be heavily underpaid, it would very much like modern slavery.

    I am very much against modern slavery as you probably have presumed and therefore I find that these people need a fair salary that does justice to their hard labor.