″Me Incorporated″ Boom Begins to Affect Jobless Stats | Business| Economy and finance news from a German perspective | DW | 07.07.2004
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"Me Incorporated" Boom Begins to Affect Jobless Stats

The number of people without work in Germany has slightly decreased in the past 12 months. Experts believe this is due to more and more people taking advantage of the opportunity to become self-employed.


You're in the driving seat now

In June, the number of unemployed people in Germany fell by 25,000, year on year, to about 4.2 million. The reason? Germans have apparently become more independent in the work sector again – which is for many the only alternative in times of such high unemployment.

This means more people are taking the initiative to find a job where there was none or to become part of a company where there wasn't any before. In a nutshell, Germany is building itself a growing self-employed industry sector.

The number of smaller enterprises coming into being has been increasing steadily since 1998. The pioneers of this upturn are the so-called "Ich AG" entrepreneurs; the unemployed people who, with governmental support, became part of the "Me Incorporated" boom now making an impact on the jobless figures.

Peggy Rittmüller was one of the first to take advantage of the support the German government offered to those wanting to start their own business.

"From a personal point of view, it is, of course, better. Now I can do really what I like and I can present my ideas," she told DW-WORLD. "From the financial point of view, it’s not so pleasant at the moment. As my husband said recently: You have not really had an income for the last 12 months," she added.

Rittmüller has been running her nutritionist practice for one year now. After she lost her job as a nurse, striking it out on her own was the only alternative. She has never regretted taking the leap of faith but the 39-year-old believes that without external help, she may not have made it at all.

A tough life at first

Rittmüller would not have her life any other way at the moment but accepts that the first tentative steps of self-employment are hard until the rewards begin to show. " If I was not married, I would have already starved. But the thing is, I am married. I have somebody who can support me financially, put a roof over my head and will pay for food."

Cornelia Bergmann talked of a similar situation. For years she worked in the office of a hardware enterprise - until downsizing cost the Berlin-based clerk her job. After endless applications resulted in nothing, the mother of two decided she didn’t just want to be a housewife, and last year joined the ranks of the "Ich AG" boom. Now the 41-year-old works from home, helping others with their tax returns.

"The first six months were very sluggish, actually. It was very hard to get work. Nevertheless, in the course of this year, I’ve had more interest. I can already say that the number of customers has increased. I had just three customers in the first year. And this was of course very difficult. I think that if it had stayed like that, I would be sweating about it now."

Trade registrations on the rise

The number of registrations for business status recorded in the first three months of this year was 11,500 in Berlin alone, an increase of 15 percent on the same period in 2003. In Germany, the total number of trade registrations last year rose about 10 percent to 810,000 in total.

Experts see a reason for this boom in the state financed business subsidies. Everybody who can claim unemployment benefit can apply to become an "Ich AG." However, the subsidy cannot guarantee a successful enterprise, says Sasha Monath, a consultant for the self-employed.

No easy way out

"Those who want to be independent and have the purpose and the desire to work - they must go for it. During the first three years, they will work twice as much as in the salaried world and at the same time, they will earn half as much and have a third of the vacation," says Monath. "But for those who really want to do it, the subsidy is really useful. But there is also a danger for those who do it because they see no other alternative. Not everybody who sets up an "Ich AG" self-employed enterprise will still be independent in two years."

The most important aspect for the sustained success of the enterprise must always be the commercial idea, says Monath. Next, they must be aware that this step involves an above-average amount of involvement with the project. Those willing to attempt this must be aware that they will have to change their ideas about the working world.

"You must have a lot of discipline. Nobody does the work for you. Nobody tells you what you have to pay attention to. If they must be in the office at six o'clock in the morning and go home at 12 o'clock at night then that’s how it must be. As a self-employed person, you yourself are constantly responsible for the turnover of your company and the satisfaction of your customer."

Independence brings hope

For Peggy Rittmüller and Cornelia Bergmann this is the reality of their everyday lives. Both want to continue with their businesses - even if they cannot be sure at the moment if it will ultimately be the right choice. Despite this, they still have a lot of plans for the future.

"My wish and dream is to get the store here really running smoothly or to move maybe to another location. And my completely biggest wish is of course to open a second one," says Rittmüller.

Bergmann also has plans for expansion: "My objective is to rent an office sometime and to employ somebody else. I have hope. And I have made this a goal for myself. Let’s see what becomes of that."

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