Germany Puts Easterners to Work

Job-creation program seen as stabilizing unemployment after private initiatives failed

THORSTEN BLOSSEY, an east German trained as a draftsman, found himself unemployed last January. He thought he could join a western engineering firm, but then heard his skills weren't up to par. He considered further training, but found himself competing with 120 people for 20 slots. For five months, says the 26-year-old, he "jobbed around" in Berlin.In June, he was hired under Germany's job-creation program and now works in Potsdam's office of historic preservation. The former capital of Prussia, Potsdam is rich in architecture but badly decayed. Mr. Blossey says he "feels great" in his new job, in which he photographs, sketches, and then removes architectural detail from buildings for restoration. Under the communists, Potsdam employed three people to oversee the city's world-renowned historic treasures. Now there are 30, half of whom owe their jobs to Germany's job-creation program. Government-sponsored jobs now account for about 23 percent of all new jobs in east Germany. According to labor specialists, these jobs are having an impact on unemployment, which began to stabilize in August. An American-style "New Deal," in which the government creates jobs by sponsoring major public works programs, was not what Bonn had in mind when it undertook the integration of the East and West German economies. The government assumed private investors would rush east, snap up bargains, build new factories, and solve the unemployment problem on their own. But the private sector got off to a slow start. The economy in the east was more decrepit than estimated. No one knew who had title to land, so no one bought property. No one wanted responsibility for environmental clean-up of old factory sites, so no one invested. Last winter, Bonn was forced to fund job-creation programs. The programs wobbled at first. Many east Germans were unaware they qualified for these government-sponsored jobs, and local administrators were unprepared to advise them. But by September, east Germany had created and filled the 280,000 job slots budgeted at $3 billion for this year. Germany's Federal Employment Office is now scrambling to fund an extra 120,000 jobs by year's end, and is requiring the east German states to chip in for wages instead of depending solely on the federal government. Regine Hildebrandt, labor minister for the east German state of Brandenburg, says that the job-creation measures are beginning to slow unemployment. "For the first time in six months," she says, "unemployment has dropped in Brandenburg. This is a sign that job-creation measures are taking hold." Unemployment in east Germany stabilized in August at about 1 million jobless, or 12 percent. The number of "short-time workers," whose jobs have been cut back or eliminated but who are still on the company payroll - dropped significantly. Putting both groups together, the picture is still bleak (about 32 percent of east German workers are either unemployed or on short-time), but, Ms. Hildebrandt says, the valley has been reached. What the Germans have is more sophisticated than the Works Projects Administration of the American New Deal. The Germans are shying away from basic, large-scale projects and instead are funding numerous smaller projects in many areas, including forestry, environmental clean-up, and tourism. In some one-factory towns where everyone's job is threatened, "employment companies" have been created where workers are hired to help spruce up the factory and grounds for new investors. Normally, the Germans place strict criteria on job-creation measures: They must not take over activities of the private market; they must not relieve city, state, or federal governments of their respective duties; and they must be for the public good. But the rules have been bent in east Germany, where state and city governments still don't have the cash to fund all their obligations. In Brandenburg, for instance, kindergarten teachers have been hired under the job-creation program, when they should real ly be on the state's payroll. While east German politicians want to further expand job-creation measures, authorities in the west are concerned that the measures will take on a life of their own and grow into a permanent subsidy - and a crutch. "You'll have enormous difficulty when you try to take it all back," says Ziegfried Leschniok, a western official on loan to to run Potsdam's employment office. As an example, he points to the current uproar among Germany's coal miners and farmers because Bonn wants to cut back long-standing subsidies. For this reason, the job-creation measures are being reviewed on an annual basis. As soon as it looks like the eastern economy and governments are strong enough to pay for the government-sponsored jobs themselves, says a spokesman for the Federal Employment Office, the federal funds will be cut back.

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