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Self-employed struggle - more need state support

Published: 3 Dec 12 16:18 CET | Print version
Online: http://www.thelocal.de/money/20121203-46543.html

The number of self-employed Germans who need basic state support to survive because they do not earn enough money themselves has almost doubled in recent years, according to a study published on Monday.

The number of self-employed people claiming the basic Hartz IV payment shot up from 72,000 in 2007 to 127,000 in 2011, research by the Nuremberg Institute for Employment Research (IAB) shows.

They now swell the 1.4 million-strong army of working people who rely on the state to get by - despite government reforms aiming to make work pay.

Germany's lack of a minimum wage has encouraged a flourishing, and controversial, low-wage economy. This new study shows how many of the self-employed are also failing to make ends meet.

Almost two-thirds of self-employed benefit claimants - dubbed 'topper-uppers' because of the way in which they are forced to supplement meagre incomes - earned less than €5 an hour, according to the study.

The most common occupations among this group included sales assistants, owners of pubs and fast-food outlets, musicians, freelance teachers, and language instructors.

Almost half of those unable to cover their basic needs were already working full-time.

They also tended to be significantly better educated than other welfare recipients. Almost 20 percent were university graduates; just 16 percent were wholly unqualified.

Despite this, three-quarters earned less than €400 a month. The evidence also suggests that they may well be caught in a tough poverty trap: only a quarter of those relying on state support in 2009 had managed to become self-sufficient a year on.

These recent figures are bound to fuel the growing unease felt within Germany at the growing numbers of the working poor - those earning so little that they cannot survive without state assistance.

DAPD/The Local/pmw

What do you think? Leave your comment below.


Your comments about this article:

17:22 December 3, 2012 by Berlin fuer alles
Before I say this is another example of Dr. Merkyl and Mr. Hyde flying up her own ass I would like to see figures across a wide range of jobs. I also wonder how many self employed are not declaring all their earnings. A lot of small bars and fast food stalls have to cash register. :-)
17:38 December 3, 2012 by Englishted
Look into the building industry ,many of the new arrivals from the east are only taken on if they are prepared to be self-employed ,yet really they are working for a employer who is cutting his or her wage bill by saving on all the "extras" they would normally pay e.g. taxes, health insurance payments, sick pay ,holiday pay and another things that should be included.

This country is becoming a low wage economy but nobody is letting the public know ,not that there would be much reaction with the look after no1 attitude that is the norm now.
19:23 December 3, 2012 by Wise Up!
This how the social welfare state perverts the market with gov't subsidies. If you create a min wage, you get more unemployment and more people reciving gov't checks. However, if you earn below a certain amount, you still get a gov't check.

If you just used free market principles, you wouldn't have all these subsidies. Germany is on a downward spiral.
21:02 December 3, 2012 by Tonne
If Germany is on a downward spiral it is because, like most other right-wing governments in Europe today, it prefers the economic theory of Hajek to that of Keynes.

If the economy is failing the choice is to cut government spending and to expect private industry to invest more, which it is supposed to do because people, having no state assistance, will have to work for whatever money they are offered.

But who would buy the additional goods this increased private investment will provide? Certainly not the low-paid workers employed to produce the goods or the other workers whose wages have been held down or reduced because of the introduction of a low wage economy.

Fr. Dr. Merkel like Thatcher before her is treating the state economy just as she would her household budget. She should have a wider perspective of what governments can do during a recession; actions which are not available to the ordinary person.
10:50 December 4, 2012 by Berlin fuer alles
@ Tonne. You are generally correct. Dr. Merkyl and Mr. Hyde is treating the Eurozone economy as a household budget also which is dangerous. Cutting the pocket money of the children does not work when these children are other EU countries.
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