Germany's Poor Little Rich City
WHY YOU SHOULD CARE
Bremen — Germany’s second-smallest state — is rich. Sort of.
By Dan Peleschuk
Picture a bustling port city at the peak of its postwar industrial supremacy: Hulking cargo ships ferry goods back and forth as massive containers swing from sky-high cranes. The sound of heavy machinery pierces the air, which is tinged with the scent of fresh steel.
Such was the scene in the Free Hanseatic City of Bremen, Germany’s smallest federal subject, for several decades. The two-city state of around 660,000, which includes the port of Bremerhaven, was long a bastion of shipbuilding and various other industrial sectors. During the Cold War, it was home to a crucial American naval presence.
But while Germany’s second-largest port continues to hum with activity, things aren’t quite the same these days. That’s because:
Despite boasting Germany’s second-highest GDP per capita, Bremen has higher income inequality than any other German state.
According to the latest federal statistics, 22.7 percent of Bremen’s residents live in relative poverty — more than anywhere else in Germany, and twice the percentage in Bavaria, the state with the lowest income divide. Relative poverty, an indicator used in Europe to track inequality, refers to the proportion of the population that earns less than 60 percent of the median income in the region.
Bremen’s story is an unfortunately familiar one to other industrial hubs plunged into financial crisis. Amid the global economic slowdown of the 1970s, manufacturing was hit hard: Two major Bremen-based shipbuilding companies collapsed in the ’80s and ’90s, directly and indirectly costing nearly 20,000 local jobs over the course of 15 years. Today, unemployment hovers around 10 percent — also the highest in Germany. That’s compared to around 5 percent unemployment nationally, and 2.7 percent in Bavaria.
Those indicators are all the more startling considering that only Hamburg has a higher per-capita gross domestic product. According to the European Commission’s Regional Innovation Monitor, Bremen has the largest export ratio of any German region. Its ongoing public research and development investment, meanwhile, is more than 150 percent the European average (and around 134 percent of Germany’s). The Mercedes-Benz plant is its largest private employer, while the Airbus factory is Germany’s second-largest. Beer brewers Beck’s and St. Pauli Girl are also based there. “It’s a poor and a rich city at the same time,” says Jörg Plöger, of the Research Institute for Regional and Urban Development in Dortmund.
As local industry crumbled, officials poured their energy and, perhaps more importantly, resources into boosting the region’s knowledge economy in particular. A sprawling technology park went up in the 1980s, and the University of Bremen, established in 1971, enjoys a solid reputation as a research institution. But funding those projects helped drive up public debt, experts say — and did little to alleviate the postindustrial malaise experienced by the disenfranchised working class, many of whom were immigrants. A legislative quirk, and the city’s small size, also means Bremen loses out on crucial tax revenue, which commuting local workers pay elsewhere.
All that, Plöger says, makes Bremen a perfect test case for studying “spatial segregation,” or how rich and poor neighborhoods are divided. For example, the district of Gröpelingen, near the harbor and once a solidly working-class neighborhood, has fallen into poverty. The Tenever district, an agglomeration of concrete apartment blocks built as the local economy began tanking, is cited by critics as an example of how public housing goes wrong when it concentrates poverty heavily in one area. “You could walk around Bremen as a tourist and have no idea that there are poor people around,” says Nate Breznau, a postdoctoral researcher at the University of Bremen.
Predictably, the precarious state of affairs has had a significant effect on local politics: The collapse of local industry has meant the steady of erosion of support for Germany’s labor-friendly Social Democratic Party, which once counted Bremen as a key electoral bastion. As a result, more left-leaning forces like the Green party, which made impressive gains in elections this year, have benefited. That’s partly what makes the region “a very relevant case study of what’s going on globally,” Breznau says.
Still, Plöger suggests that given Bremen’s small size, it’s not exactly fair to compare it with massive federal subjects like Bavaria as a primary indicator of performance. And, Breznau adds, the city’s dynamic atmosphere and open culture makes it an attractive destination — if only on the surface.
But officials have yet to find a way to effectively spread the wealth. Nearly a quarter of Bremen’s population is waiting.
- Dan Peleschuk, OZY Author Contact Dan Peleschuk