German elections pit Merkel, challenger over poverty problems

Thomas Peter/Reuters - A long exposure photograph shows an election campaign poster of German Chancellor and conservative Christian Democratic Union leader Angela Merkel in Berlin, Sept. 12, 2013. Encouraged by late gains in opinion polls following his strong debate performances against Merkel, German center-left challenger Peer Steinbrueck has sharpened the tone of his attacks on the chancellor in a bid to close the gap.

BERLIN — Germany has near-record-low unemployment and a locomotive-strong economy, which leaves Frieder Beckmann with a question: Why can he get a job that pays only $2 an hour?

It is a kind of question that is also being voiced by other Germans, who say ordinary people have benefited little as Germany has prospered, despite all the rosy headlines about the country’s economic miracle.

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The complaints have put pressure on Chancellor Angela Merkel, who has touted her economic stewardship in a campaign that will decide whether the German leader, who took office in 2005, will serve a third four-year term. In their decision Sunday, voters will shape the direction of German-led crisis efforts across Europe.

Beckmann, 64, is among the critics.

“The task of the government is to create jobs,” he said. “There are so many weak spots in the way they govern.’’

A former technical writer for engineering companies including Siemens, Beckmann has been struggling with unemployment for a decade, bouncing between joblessness and poorly paid work. With the help of unemployment benefits, he scrapes by on about $1,130 a month, living a constrained life in a downtrodden patch of Berlin where head-scarved Turkish women swerve their strollers to avoid the strung-out drug addicts who colonize public park benches.

He says he misses his old life, the one in which he could afford the silver Mitsubishi Colt that he had to give up a few years ago, and when he didn’t have to go to a food pantry once a week to pick up a bagful of castaway groceries.

In Merkel’s campaign speeches and public addresses, she points to an unemployment rate of 5.3 percent, down from 9.8 percent a decade ago — an enviable figure that countries such as Greece and Spain, where more than one in four workers is out of a job, can only covet. Joblessness dropped in Germany throughout the Great Recession, a record that economists from around the world have flown in to study.

Behind the numbers

“Today, many people are better off than they were four years ago,” Merkel told lawmakers this month. Her coalition “wants to continue this work, so that in 2017, even more people can say: ‘We are doing better in our country,’ ” she said.

But the numbers obscure the hardship that comes from increasingly prevalent low-paid jobs, says Merkel’s challenger, the center-left Social Democrat Peer Steinbrueck. Germany is one of the few European countries with no minimum wage, and Steinbrueck is fighting to implement one of $11.20 an hour. Insecurity should have no place in such a wealthy country, he tells the crowds of supporters who come out to see him as he barnstorms across this nation of 82 million people.

The gap between the poor and the rich has widened over the last 15 years, which is leading to tensions in society, Steinbrueck said this month.

Under Merkel, Germany has positioned itself as an exemplar for Europe, partnering relatively generous social benefits with efforts to liberalize the job market and balance the budget. But even Europe’s model economy is facing tough problems, critics say, pointing to the blossoming of a low-wage sector, and the steady attenuation of salaries, pensions and welfare benefits because they have failed to keep up with inflation.

The insecurity at home has contributed to German taxpayers’ caution about committing money to bail out troubled European neighbors in recent years. Median income in Germany was almost twice that of Greece in 2011, but for Germans who see that each euro they earn buys them less wurst at the grocery store, a sense of vulnerability remains.

Few quibble about Germany’s overall prosperity, and Merkel’s backers say that in a time of global economic troubles, stability is an achievement in itself. Proponents of Merkel’s center-right coalition say the talk of increasing vulnerability misses the bottom line: a country with decent economic growth and solid government finances that weathered the great recession better than just about any of its peers. Germany remains the envy of its struggling neighbors and has even started to try to recruit highly skilled foreign workers because it does not have enough qualified workers to meet demand.

Merkel’s challenger

Steinbrueck, the challenger, has struggled to connect with voters, who have been turned off by his personal style. He made headlines last week for appearing in a national newspaper with his middle finger raised, and, although he is running a campaign targeted at ordinary workers, he has complained that the chancellor’s $272,000 annual salary is not high enough.

But recent polls suggest that he has made strides in closing a gap between a possible center-left coalition and Merkel’s center-right one. According to a Infratest poll last Thursday, 47 percent of Germans would like Merkel and Steinbrueck to rule together in a coalition in a reprise of their four-year arrangement between 2005 and 2009, when Steinbrueck served as finance minister.

If that happens, analysts say, Merkel would be tugged leftward and her coalition partners would use the opportunity to push their minimum-wage plans, which Merkel opposes. Steinbrueck also favors a more generous attitude toward struggling European countries, although he has not suggested he would take Germany in a radically new direction on the bailouts.

Nearly a quarter of all German employees were classified as low-wage earners in 2010 by the research arm of the German Federal Employment Agency, a proportion second only to Lithuania among 17 European countries that the agency studied. So-called mini-jobs, which allow people to earn up to $600 a month without paying taxes but also while receiving fewer benefits, have boomed as a result of reforms put in place in the early 2000s, which replaced the model of full-time, full-benefits employment in some places, such as grocery stores.

In a recent Allensbach Institute survey of Germans ages 30 to 59, just a quarter said they expected to be worry-free about finances in their old age, even though Germany’s per capita income has nearly doubled in the past 20 years.

“It is not justified for us to have such a large low-wage sector in Germany. The wealth is there,” said Markus Grabka, an economist at the German Institute for Economic Research who studies income inequality. “The distribution between the groups is a problem.”

Petra Krischok contributed to this report.

 
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