Managed Transition in German Coal Town Delivers Jobs, Holds Off Right-Wing Surge
While North America grapples with job loss in sunset industries like coal and oil, leading to a grassroot stew of rage and hopelessness that fuels the rise of politicians like Donald Trump, it’s a very different story in Germany, where blue collar workers are a core constituency for newly-re-elected chancellor and noted climate hawk Angela Merkel.
Merkel’s election win over the weekend, her fourth straight, was tinged by a decline in popular vote and the third-place finish of a far-right party that placed members in the Bundestag for the first time. Even so, the scene in Dortmund, a city “in the heart of what was once German coal and steel country,” helps explain why “there is no German counterpart to France’s Marine Le Pen, Britain’s Nigel Farage, or America’s Donald J. Trump—at least not yet,” the New York Times reports.
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“As in much of Europe, populism is on the rise in Germany, fed by frustrations over rising inequality and an influx of immigrants,” the Times notes. But “Dortmund and other one-time factory towns in Germany have largely avoided the working class alienation that nourished populist sentiment elsewhere.” Significantly, “through a combination of public policy and entrepreneurial ingenuity, the city has attracted new jobs in sectors like semiconductors and logistics to replace the ones lost in heavy industry, while retaining a core of manufacturing jobs. Unemployment has fallen drastically in the last decade and continues to decline.”
“More than any other wealthy nation, Germany still offers blue collar jobs that provide a middle class income for people without college degrees,” the Times states. “Although the country has suffered a steep decline in factory jobs since the 1970s, 19% of Germans work in manufacturing, nearly double the percentage in the United States or Britain, and higher than in Japan or South Korea.”
“We had the coal crisis. We had the steel crisis,” said Oliver Hermes, CEO of Wilo, a local water pump manufacturer. “That’s the big advantage of this area. It knows how to handle change, and the people here are very flexible.”
The Times traces much of the difference to the way Dortmund handled a “steep decline” that began in the 1970s, with the last coal mine closing in 1987 and the last blast furnace for making steel shutting its doors in 1998. “Local political leaders took action well before the mines closed. The government built a technology park, which offered office space to fledgling companies, and provided entrepreneurs with start-up capital.” And “to ensure a supply of highly skilled workers, the State of North Rhine-Westphalia expanded the Technical University of Dortmund, which is now among Germany’s largest universities, with 34,000 students.”
In addition to fostering what one local entrepreneur called a “good start-up culture”, Dortmund has built social infrastructure, turning a big, abandoned steel mill into an artificial lake that is now surrounded by low-rise offices, apartments, and cafés.
“All of this comes at a price conservatives in America would find unacceptable,” the Times notes. “The government safety net here is more comprehensive, with taxes to match, including a 19% national sales tax. Germany has universal health insurance, relatively generous unemployment benefits, and free university tuition. The government plays a role in the economy that many Americans would consider heavy-handed.”
But the bottom line is that, when a big company folds or restructures, there’s a pathway for the people who lose their jobs: after a local ThyssenKrupp plant laid off 90% of its 1,300 workers over a period of years, “no one had to go to the unemployment office,” said Sabine Birkenfeld, chair of the city’s workers’ council.
With another 2,000 jobs now at risk in a new merger between ThyssenKrupp and Tata Steel, she added, worker representatives are pushing for the best possible terms. “If no one lands on the street,” she told the Times, “then there won’t be any fodder for the right wing parties.”