In the heart of Berlin, the Betahaus, one of the country’s largest coworking spaces, is teeming with young self-employed workers, laptop in hand. They are developers, designers, translators…
The place has become the symbol of this new and increasingly dynamic branch of the economy, a symbol of the digital age. The flip side of the coin is that many of these workers have no workers’ rights. But while the law currently barely recognises them, the German trade unions are taking an interest, and increasingly so.
“Trade unions have tended to look askance at self-employment” concedes Gunter Haake, the self-employed workers’ advisor at the German service workers’ union, Vereinte Dienstleistungsgewerkschaft (Ver.di).
“We think this can be a really good way of working. But the workers must be paid fairly, and have genuine social insurance.”
Unfortunately, this is still all too rare. Ver.di’s representatives have been aware of this for a long time, and 15 years ago they created a special branch for self-employed workers.
“It is because we represent occupations in the cultural sector, where a lot of people are freelance. But increasingly this status applies to all kinds of service jobs, in new technology, and even janitors for example. In the health sector too, freelancing is booming.”
The membership figures bear this out. Ver.di’s self employed workers’ branch now has 30,000 members.
There are over 2.3 million self-employed workers with no dependent employees in Germany, the “solo” freelancers, as they are known here.
In 2000, there were still only 1.8 million, according to the reply by Germany Federal Institute of Statistics to a parliamentary question by Die Linke, in October 2015.
So their numbers are increasing rapidly, but not their income. In 2014, the average net income of Germany’s “solo” self-employed was only 1,500 euros per month (UD 1,690). That is not very much for one of the richest countries in Europe.
Some earn much less. Unlike for all German employees since 2015, the minimum wage is not compulsory for freelancers.
As a result, hourly rates of pay lower than the minimum wage of 8.50 euros (USD 9.50) are possible. And common.
A study published last year by the German institute for economic analysis DIW shows that in 2009 18% of “solo” self-employed workers earned less than 5 euros (USD 5.60) an hour.
Industrial sector equally affected
“For as long as self-employment is used as a means of putting workers in competition with each other, we have a problem” says Gunter Haake. A problem that is also recognised by the big industrial union federation IG Metall.
The number of self-employed workers is increasing in industry just as much as it is elsewhere. IG Metall has taken note and opened its doors to them this year.
“Since the beginning of the year, self-employed workers without employees who are active in the IG Metall sectors can affiliate to us. It’s new. This is a new direction for IG Metall, which is continuing the commitments it has already made to temporary workers”, explains Robert Fuss, head of the Faircrowdwork campaign launched last year by IG Metall.
This information site is aimed specifically at freelancers who use “crowdwork” platforms, where they can offer their services as a programmer, software tester, translator... but as a self-employed worker who is paid by charging a fee.
The trade union’s site includes a comparison of the rates charged, an evaluation of different platforms, legal information. But above all, IG Metall has set up a permanent telephone help-line for these workers of the digital age.
“And we get a lot of calls” says Robert Fuss. “We have found that the labour world has changed significantly as a result of digitalisation. The nature of work is changing radically, in the sense that there is ever greater pressure on workers, that there is a much higher use of temporary labour, of sub-contracting, of forms of employment that have far less protection in law. IG Metall began taking action on this years ago. We have negotiated a collective agreement for temporary workers, we have fought for regulations governing sub-contracting. And we have found that there is this new trend to externalise jobs, no longer hiring inside the factory but rather turning to freelance platforms. In industry this concerns jobs such as programming, data collection and technical translation.”
As they are neither the employees of the enterprise for whom they are carrying out a task, or of the platform they use to find their assignments, the “crowdworking” workers have none of the rights of the employees present on a production site.
“They are excluded from all the regulations concerning the minimum wage or protection from dismissal” says the IG Metall representative. The union is not prepared to accept this situation: “We want regulation governing this form of work too.”
To achieve this, in the medium term, the industry union federation has been trying for the last few months to draw the attention of the German politicians to the issue. They have already found a sympathetic ear among the Greens. At the beginning of the year the environmentalist party adopted an initial series of positions to defend the rights of this new class of precarious workers.
They propose, for example, a compulsory minimum fee. “Social dumping has no place in the modern world of work” say the Green MPs. “Trade unions and employers’ federations must include minimum working conditions and fees for independent workers in their collective agreements. Just as minimum wages are foreseen for employees in the sector, we want to make minimum fees for each sector possible for self-employed workers.”
To do so, however, the law will have to be changed. Currently, German law does not allow self-employed workers to negotiate their pay collectively.
“For self-employed workers, anything negotiated collectively at the trade union level could be considered illegal according the German law on cartels” explains Haake.
For the time being, therefore, Ver.di has opted for other means of defending its members. “We put pressure on the town councils for example to provide training and education, where the local authorities use a lot of self-employed workers. We go to see the local councillors in their home town to talk about it.”
There is one point on which the trade union representative is calling for political intervention however: the battle against fake self-employment, in other words workers who only work for a single employer, who are present on their premises, but who are not treated as employees.
“In that sort of situation, self-employment is simply a means of putting pressure on wages and saving on social security contributions. That does need political regulation. It could involve using the notion of “unfair” pay, as applied to the shamefully low wages that existed before the universal minimum wage was introduced in 2015, for example. At a broader level, the politicians need to understand that the employment landscape is changing and that they are going to have to think about old age insurance and financing retirement differently.”
Because a labour market that has more self-employed workers and fewer employees will automatically mean that less is being paid into Germany’s social security coffers. And therefore that the pension system is at risk.