In Germany, the economic crisis weighs heavily on the poor

Reporting from Zuffenhausen, Germany —  The town that produces some of the world’s most expensive and luxurious sports cars is a staid hamlet with weedy, trash-littered stretches.

Every workday, Porsche assembly line worker Anton Deutschitsch drives his Hyundai past its casinos and Lotto stores, catering to those a little less skilled or lucky.

He’s grateful that he’s kept his job of 32 years, helping put together nimble Boxsters or sleek Carreras, but knows he could end up among the less fortunate at any time. For now, he’s got fewer colleagues, is assigned more tasks and is earning about the same amount as a few years ago.

He hears talk of more belt-tightening. And he worries about where it’s all headed.

“There’s always more work and it’s always harder,” Deutschitsch, 57, said as he walked to begin his shift.

Germany has long been a haven for workers’ benefits and rights, but it is facing serious economic anxieties.

Industries and the wealthy have successfully wrested concessions from the government that have made it one of the most business-friendly countries in the world, where there is little tax on inheritances or personal wealth.

At the same time, Germany is about to further pare down its social welfare system in austerity measures crafted as a response to the economic meltdown. Leaders of the Roman Catholic and Protestant churches have spoken out against what they see as a grave social injustice about to be carried out and increasing polarization between rich and poor.

Critics say the moves place the burden of the recent bailouts of the country’s banks and southern European debtor nations on poor, struggling or working-class Germans. At factories and among the working poor, job security is used to persuade employees to accept lower or stagnant wages and longer hours.

“People are angry,” said Uwe Meinhardt, a leading official of IG Metall, the German industrial union, in Stuttgart. “They feel there is a social injustice. But most of them still have jobs.”

Germany’s steps contradict prescriptions to respond to the economic crisis offered by the Obama administration, including pleas to stimulate global economic demand by putting more cash in the pockets of Germans, who on average produce more in fewer hours than workers in most countries.

Here in Zuffenhausen, outside Stuttgart, Porsche years ago implemented Japanese-style assembly line techniques to make cars more efficiently. Though sales dropped by a third in the fiscal year that ended in mid-2009, they have since rebounded.

“Porsche is one of the most lean and efficient carmakers in the world,” said Dirk Erat, a spokesman for the company. “We earn double-digit margins.”

Companies such as Porsche and nearby industrial powerhouse Daimler-Benz have weathered the financial storm and returned to profitability and robust exports, but their workers lives’ have not substantially improved. Meanwhile, Daimler-Benz has added Saturday shifts for its assembly plants in June and July to meet rising demand.

German companies have been relying more heavily more on subcontractors and temporary workers, which has driven down unemployment rates, and to some extent, living standards.

“We work harder, exports went up, the profits went up, but the salaries, the wages did not go up,” said Frank Englmann, dean of faculty of business, economy and social science at the University of Stuttgart.

Meanwhile, the government has reduced taxes on the rich. Despite Germany’s reputation as a social democratic haven, there’s no minimum wage and the retirement age was recently raised from 65 to 67.

The taxation system can seem arbitrary if not cruelly slanted against the less well-to-do. The value-added tax on children’s items such as toys, playground equipment and car safety seats is 19%, whereas the rate for ski-lift tickets is 7%.

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Life for Germany’s poor is getting harder, and experts describe a new class of impoverished people who’ve been gainfully employed for their entire adult lives now swallowing their pride to ask for handouts. They hail from newly devastated industrial areas such as the strip between Stuttgart and Esslingen along the Neckar River, where small factories have been shuttered as a consequence of the economic crisis.

“Now it’s a new group of poor people, who’ve been working honestly for years,” said Beatrice Gerst, an administrator for Trott War, a newspaper sold by homeless and formerly homeless people in Stuttgart.

Chancellor Angela Merkel has long contended that Germans live above their means. Though her government has proposed austerity measures that would burden the poor, it has refused to trim money for higher education and research, which studies show mostly benefits the more elite classes.

So even as factory workers, taxi drivers and those on welfare see a bleak horizon of longer hours with fewer benefits, the educated middle classes see a rosier future.

“I think I will get a job pretty quickly,” said Danny Hermann, a 23-year-old master’s candidate in agribusiness in Stuttgart. “I’m not afraid because I think I am very flexible.”

daragahi@latimes.com