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Slow German economy finds bright spot in
The Christian Science Monitor
GERMANY – Ralf
Heinrich first realized his tour company was in trouble in the summer of
2002. Americans, who represented close to half his turnover, were staying
home after Sept. 11, 2001, and his company's English-language historical
tours of central Munich were sparsely attended.
So the German entrepreneur started thinking what services
he could offer that would be more in demand. Since last month, instead of
whisking camera-toting travelers to the Alps, he has provided home-care
workers for Munich's increasing ranks of seniors.
"Before I started this," says Mr. Heinrich,
"I had no idea about caring for the elderly, but I am good at
managing a small business. I jumped in because it is very attractive from
the perspective of growth potential.... There are seniors everywhere in
ever- increasing numbers. One doesn't have to travel too far to find
In catering to the elderly, Heinrich has joined a wave of
new companies in a sector that is among the few growing in Germany's
struggling economy. The numbers of retirement homes, home-care services,
and hospitals serving the elderly in Germany have risen 20 percent since
1996, according to the country's national statistics office. During that
same period, capacity in the country's senior-care facilities, including
private as well as government, church, and charity operations, has grown
by more than 46 percent.
Germany's combination of rising life expectancy and low
birth rate means that by 2050, more than 1 in 10 Germans will be
octogenarians or older, compared with 4 percent today, according to the
central office. While the birth rate - currently at 1.38 children per
woman - is higher than that of Italy and Spain, two other countries on a
continent with aging populations, the demographic trend of a growing group
of elderly has been developing in Germany since World War II.
"The trend in aging is to be seen elsewhere in
Europe," says Holger Jenrich, editor in chief of Altenpflege, a trade
journal devoted to senior care, but in Germany it's "especially
dramatic." He adds, "The effects are already becoming apparent.
We are in a situation where we need to build even more retirement homes
and we need even more companies caring for the elderly."
But staffing could be an issue. Otherwise thin want-ad
sections here are full of offers for retirement-home nurses, in-house care
assistants, and even students to help elders with shopping.
Efforts to train workers for the industry are being
stepped up. But more than 80 percent of those trained soon quit because of
the strenuous work and the poor pay, says Mr. Jenrich. That leads to a
steady turnover in positions, many of which are staffed by Eastern
European immigrants, especially from Croatia and Poland.
In an effort to lure more workers, many cities have
started advertising campaigns to make the job more attractive. In Hamburg,
for example, hundreds of billboards have appeared featuring celebrities
appealing for new employees.
The rising number of seniors in Europe has made them a
consumer group with increasing clout. Andreas Hollinek, the operator of an
Austrian Web portal devoted to marketing for seniors, says advertisers
across Europe are already focusing more on seniors by using older models
in advertisements and emphasizing the comfort and user-friendly aspects of
products rather than their speed or glitz.
Mr. Hollinek also points out that the group currently
entering retirement in Europe is wealthier than any of its predecessors
with more than € 90 billion ($112 billion) in discretionary cash per
year to spend. He cites the financial health of businesses catering to
them: Austrian spas are full, the real estate business in Spain and Italy
is doing well as rich retirees from northern Europe move south, and
cruises remain immensely popular.
"There isn't anybody who can afford to ignore this
group anymore," says Hollinek. "In the future, senior citizens
will control demand in our economies."
But German retirement may not continue to have such a rosy
hue. As in France, Austria, and other parts of Europe, the country's
state-funded pension plan is increasingly strapped. In France, parliament
late last week approved a pension reform plan that will bring
public-sector workers into line with the private sector, requiring them to
work 2-1/2 years longer to qualify for a full pension.
Currently, there are 44 retirees in Germany for every 100
people employed. In 25 years, that number is expected to grow to 71 per
100. Chancellor Gerhard Schröder's government introduced a plan last year
to try to move workers toward privately financed pension plans, but so far
response has been limited.
"There have been discussions to continue to move
toward a system imitating that used in the United States," such as
allowing individual retirement accounts or employer-funded pensions, says
Ralf Ulrich, a professor of demographics at Humboldt University in Berlin.
"Nevertheless, the financing of the pension system remains the single
biggest challenge facing Germany and Europe."