Why the number of self-employed people in Germany is rising

Why the number of self-employed people in Germany is rising
Many Germans are finding that one job is not always enough. Photo credit: DPA
Companies are increasingly outsourcing services, and as a result the number of self-employed workers in Germany has risen sharply. Many are learning that working one job is just not enough.

Hundreds of thousands of people in Germany are pursuing a day job while simultaneously being self-employed. Adding up the numbers, around 764,000 people were employed as well as being self-employed in 2018. 

The number has almost tripled since 1994, a year where there were only 262,000, according to figures provided to DPA by the federal government through a request by the Left party.

By 2017, the number of people employed 'twice' was even higher, at 794,000 with some fluctuations. Youngsters are most likely to be “hybrid self-employed.” Around 30 percent of self-employed workers between the ages of 15 and 34 were also holding down a day job. 

These “hybrid self-employed” individuals make up 16.4 percent of all working people; In 1994 it was only 7.4 percent.

Many of these “doubly-employed” employees work in sectors that don't cover pension plans. Meanwhile, freelancing is already well-established as a gig lacking benefits. 

However new regulations planned by the government might change this, both for those “hybrid self-employed” and anyone simply self-employed.  

READ ALSO: Why are more and more people in Germany working multiple jobs?

Solo workers on the rise

The numbers of solo workers, or workers who don’t have any other coworkers, has also risen sharply. The numbers of solo workers spiked at 2.45 million in 2012, in stark contrast to the 1.45 million in 1994.

Since 2012, the number has decreased again with fluctuations, and as of 2018 the number stands at 2.23 million. 

According to the German Institute for Economic Research, one reason for the greater number of solo self-employed persons is the fact that the Federal Employment Agency has been promoting “Ich-AGs” (or single-person companies) since 2003. The push for these companies came because many self-employed people were unable break out of the low-wage sector.

The total number of self-employed workers rose from 3.5 million in 1994 to around 4.7 million in 2018. In 2012, the number of self-employed workers peaked at 4.9 million. The numbers have been falling again since.

According to the Federal Ministry of Labor, the fact that the number of self-employed workers rose so high in 2012 is because of “the increased tendency to outsource certain services to freelancers.” They say the decline following 2012 was likely due to the strong economy.

Advertising materials for a “Founder's Week” in Erfurt, Thuringia, read “It's better to be your own boss. Found something, but do it together.” Photo credit: DPA

Working without security

An expert from a Linke-group called “Change in the World of Work,” Jessica Tatti, who originally requested the data, called for more social protection for the self-employed. “The nasty trick companies use to outsource work to save money has been observed for years,” she said.

“Solo self-employed people then often do the same work as previously dependent employees, with the serious difference that they have no pension and health insurance covered by an employer, no paid sick days, no required vacation days and no minimum wage.”

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Self-employment is often involuntary and precarious, especially through online platforms, Tatti said. She referred to internet platforms offering deliveries, transport or cleaning. “For most people, these work phases often come without retirement security,” she said.  

A large proportion of the self-employed earn less than the minimum wage, and few are covered by a pension. For this reason, the self-employed would need coverage from a pension insurance. 

Germany’s Labour Minister Hubertus Heil (SPD) has already announced plans to tackle these issues. His plans would guarantee pension insurance for all self-employed workers. Up until now, pension insurance only covers special groups like psychotherapists and midwives. All others have to provide for themselves. 

 
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