Does Germany have a poverty problem?

Templin, Germany – The immaculate appearance of German Chancellor Angela Merkel’s hometown, with its medieval city walls and well-kept market square, belies a real problem.

The unemployment rate in Templin and the surrounding region, an hour’s train ride north of Berlin, stands at 14 percent – among the highest in the country, and more than twice the percentage nationwide.

Most of the agricultural jobs in the area, which had been part of Communist East Germany, disappeared in the years since the Berlin Wall fell. The textile industry, once the biggest employer in town, has been decimated. Young people have moved away.

Plans to redevelop the former East Germany to prevent emigration and lower unemployment haven’t worked out as envisioned, according to poverty expert Margherita Zander of the Technical University of Munster.

Wages and pensions are lower here than in the former West, leading the anti-capitalist Left party to hang election posters around Templin crying out: “You forgot about East Germany’s pensions, Angela!”

“It’s a fact that differences between those who have lots and those who have little have been growing wider,” Templin Mayor Detlef Tabbert, a member of the Left party, told Al Jazeera in his office. He blames German tax policy and employers who pay wages “that are below the level of dignity” for the gap.

Poverty problem?

Chancellor Merkel and her centre-right Christian Democratic Union (CDU) are campaigning on the message that Germany has dodged the fallout from the global financial crisis, with unemployment declining and exports staying strong – while Germany’s eurozone peers further south squirm under mountains of debt and sclerotic labour markets.

Her critics are not so sanguine, though, saying Merkel has presided over rising inequality within her own country.

Absolute poverty is almost unknown in Germany; almost nobody has to worry about, say, starving to death even in the country’s poorest parts. Still, about 12 million Germans live in relative poverty, defined as those earning less than 60 percent of the median income.

The gap between the haves and have-nots is more substantial if one looks at wealth instead of income: A government report published earlier this year found the richest 10 percent of German households own about 53 percent of the country’s wealth – with the bottom half holding a scant one percent.

Mayor Tabbert’s solution? His party, which polls show is supported by about 10 percent of German voters, demands a minimum wage of 10 euros an hour.

No national minimum wage

Unlike most European countries, Germany has no national minimum wage. Instead, there’s a complex patchwork of about 480 minimum wages, depending on the type and location of the job. These can varyfrom 7.50 euros ($10) to 13.70 euros ($18.50) an hour.

Electricians in the former East Germany are entitled to at least 8.85 euros ($12) an hour, but their peers in the former West get 9.90 ($13.40). Trash collectors across the country must be paid 8.68 euros or more. Unskilled construction workers get 10.25 euros to 11.50. And so on.

But some sectors are not covered by any minimum wage, and there have been reports of employers paying workers as little as 2 euros ($2.70) an hour.

In Berlin’s Neukolln neighbourhood, Betul – a young woman of Turkish background who did not give her last name – said she works at a bakery for just 5 euros ($6.80) an hour. “So I would be very happy with 8.50,” she told Al Jazeera, referring to the minimum wage proposed by the centre-left Social Democratic Party and the Green Party.

Betul has worked there for just six months, but her friend Sibel, a 21-year-old, said she had been working at the bakery for five years at the same rate of 5 euros an hour.

If it were up to Germany’s left-of-centre parties, Betul and Sibel would be earning much more. Yet although elements within Merkel’s CDU have said they support a single minimum wage as well, Merkel doesn’t and her coalition partner, the Free Democratic Party, is also opposed.

At a CDU rally in Potsdam on Monday night, Merkel spoke for several minutes about a minimum wage. “That sounds good: 8.50 euros for everyone. But all I ask you is: When will it be raised the next time? When people scream especially loud in the Bundestag, or when the next election comes around?”

It’s not politicians’ place to get involved, she concluded. What the government should do instead, in Merkel’s view, is to lean on employers, workers and trade unions to hash out deals on their own.

Merkel is a popular chancellor – but a large majority of Germans disagree with her on this issue, according to a poll conducted this summer by DGB. Even a majority of company managers favour a minimum wage, says one survey.

Rene Kecke, a CDU voter who works for the Berlin police department, said the minimum wage is the only area where he differs with the party he backs. “People who work 400 euro-a-month jobs – they are being exploited,” he told Al Jazeera.

‘Mini jobs’

Kecke was referring to what are known as “mini jobs” – a type of part-time employment sanctioned by the government whereby workers can earn up to 450 euros ($540) a month tax-free, though often at low hourly rates.

Mini jobs were created in 2003 as part of sweeping labour market reforms passed by a left-leaning government led by the SPD and Greens, envisioned as a way to lower high jobless rates and boost participation in the workforce. The temporary contracts make minimal requirements on employers, who often don’t have to provide any extra benefits.

“In Germany, you can work and you can [still be] poor,” said Lisa Paus, a Greens member serving in the Bundestag. “There are seven million people in Germany which have to work and [also] have to go to the job centre” to get additional benefits from the government, she said.

On Tuesday afternoon, Alexandra Grube stopped by a Berlin job centre with her hefty German shepherd to apply for unemployment benefits. Noting that women are especially dependent on low-paying mini jobs, Grube said Germany needs a national minimum wage instead.

She always voted for the Greens in the past, but this time around she’s fed up with all of Germany’s major parties, describing them as out of touch with her needs. “Even parties who have been fighting for the poor,” she said, “don’t know how much milk costs.”

Follow Sam Bollier on Twitter: @SamBollier