Eastern German Jobless Rate Soars

IN Neuhaus, in southeastern Germany, one could easily feel on top of the world. The town sits atop a mini-mountain with a magnificent view of evergreens known as the Thuringer Forest.

But Neuhaus is anything but an exhilarating experience for the 8,000 people who live here. It has been hit by a wave of joblessness as the main employer in town, Microelectronic GmbH, reduces its work force from 2,600 to 600. Inefficient glass and porcelain factories in the nearby valleys, another major source of jobs, are either failing or also greatly reducing their work force.

In all, 36 percent of the area's workers are either unemployed or working reduced hours. Unemployment is likely to get worse before it gets better, most people here say.

This mirrors almost exactly the situation in eastern Germany as a whole, where 3 out of every 8 workers (37.5 percent) no longer have a job or no longer work full time. Joblessness has soared so rapidly that unions are trying to extend provisions that protect workers from layoffs. The provisions were to expire June 30, releasing another wave of unemployment.

In Neuhaus, the focus of activity has switched from Microelectronic to the employment office, a refurbished, whitewashed building with a puddle-laden parking lot. Newly laid-off residents come to the office expecting to be handed a job, says Bernd Unger, the office's director. But unfortunately, it's not so easy.

On this particular day, for instance, job counselor Ute Kuhnlenz has only nine jobs available and not particularly popular ones at that. They are in insurance and sales and require the employee to have a car and work on partial commission. One after another, people file into her office and turn the jobs down.

Job hunters want security

"People want a secure position where they can go to work, check in, work their day, and then go home," says Ms. Kuhnlenz. "Personally, I think they don't want to take any risks. Most of them show no initiative. From time to time I see someone who I think could do these jobs and I suggest they at least try it. But they refuse."

After seeing Kuhnlenz, most jobless head across the hall and join the line in front of Petra Titze's office, where she steers people into government-funded retraining programs that can last anywhere from several months to several years. With few jobs available, retraining is viewed as a way to pass time constructively until economic recovery takes hold.

"In the next two or three years, there won't be any work. I figure it's better to add to my qualifications, because no one has any use for what we've all learned so far," says Monika Breitenbach, a 33-year-old single mother out of work since December. Ms. Breitenbach has just finished a three-month computer training course and is going on to a two-year course to become a tax adviser.

Mr. Unger of the unemployment office says some of the glass and porcelain factories in the region will eventually come back in the form of small, efficient manufacturers. He also expects tourism will play a major role, though he admits that the Thuringer Forest is in poor shape. Under a government job-creation program, he has filled about 500 jobs related to forestry and will have 500 more available by year's end.

From the point of view of Mayor Bernd Lauche, who is trying to present Neuhaus as an attractive investment to outsiders, economic recovery seems a long way off.

Neuhaus lies off the beaten path with no easy access to the autobahn. In winter, chilling winds beat the bald hilltop. "About the only thing I can do is offer land cheap," he says. Indeed, he has succeeded in selling off land for an industrial area to accommodate 10 to 12 small manufacturers. But like many other east German towns, much of the land is locked up in ownership disputes.

Mr. Lauche would like to begin street and building repair. For each project, the federal government puts up 49 percent of the costs, he explains. But the town simply doesn't have enough funds to pay for the other 51 percent. "I haven't been able to start on a single building project," Lauche says.

Despite this grim outlook, he sees no significant deterioration in the public mood here. He attributes this to the town's fairly close location to former West Germany and to rather generous unemployment benefits. "Trouble will begin when the money runs out," he says.

Crime is under control

An increase in suicides, alcoholism, and violent crime may be evident in other east German cities and towns, but not in Neuhaus, says the Rev. Michael Kleditzsch. "The people who were alcoholics before, now have more reasons to tip the bottle," he says, but there's no new wave of alcoholism. There have been more break-ins, but he believes this has more to do with experimentation with new-found freedoms than with unemployment.

"People in Neuhaus have become more aggressive, though this isn't apparent on the outside," contradicts Jana Zocher, a 25-year-old unemployed resident.

Within families, especially where both husband and wife are jobless, tension is increasing, she says. In her opinion, those who have it hardest are not young people, but those more than 50 years old who still want to work but are least likely to find new jobs.