How a servant struggles with the rising prices

Hamburg.The misery has a history, for Oliver Riek it does not begin with the new news of ever higher prices, but in April 2020, with the pandemic. At the time, he was the breakfast manager at a hotel, a good job, but the virus stopped the night’s business for the time being. For Riek, that means short-term work. And shortly after: unemployment. Because his contract expired. “Unreasonable time constraint,” he explains in a bitter voice, as if he were talking about a hated old acquaintance, a fundamental evil in his industry. “It broke my throat.”

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Now, two years later, he has a job again. At a hospital café. Regulated working hours, standard salary, but he still has no more than 1,400 euros net at the end of the month, despite almost 20 years in the job. Riek is 41 years old, he has a son, he lives in Hamburg, one of the most expensive cities in the country. So now he has to sell Knut. Knut, he calls it his 17-year-old Renault Clio. “In fact, he was always my buddy,” says Riek, his friend. “But 2 euros for E10, it does not work for me.” He has not driven it for two months. And then Knut is now Oliver Riek’s completely personal first victim of inflation.

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Minimalism can save

Riek wears a dark blue hoodie under a shabby black jacket. “My minimalism,” he says, “has often saved my ass.” Now he has to do it again.

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So inflation. Rising prices. Goods have recently become 7.3 percent more expensive compared to the previous year, which is the highest value in 40 years. But this number is misleading because it seems so constant and motionless when in fact it is not. In fact, there are different inflation rates depending on how much you earn and how many children you have.

“Energy and food price shocks hit low-income households particularly hard,” writes the Department of Macroeconomics and Business Research under the Hans Böckler Foundation in its latest analysis. It sounds obvious, but the hidden effect is that inflation is higher among the poor, because petrol, heating oil and food, which are currently in high prices, account for a higher share. The inflation rate for singles with more than 5,000 euros net per month is the lowest: 6.0 percent. It is highest for couples with two children and an income of 2,000 to 2,600 euros: 7.9 percent. So it is the people who have suffered anyway who are hardest hit by the rising prices. Basic insurance recipients, many pensioners, mini-workers. People in industries where wages are often low. Trade, logistics for example, and especially: gastronomy.

Inflation is an objective value on the one hand – and a feeling on the other. And what is she doing with the people now?

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The joys of additional sales

Oliver Riek is very enthusiastic about his industry. So loud and engaging that other guests in the café in Hamburg’s St. Georg neighborhood listens quietly. The first order he took, then at a Bundeswehr officer’s fair, was a large cola and a currywurst. He was excited. “You will never forget the first guest.” He talks about the joy of “selling more” when a guest might order a drink more than he really wanted, and about his little tricks (“always talk to the woman with couples”), from evenings when the tip was much higher than the salary. Riek was a right-wing extremist in his youth, and he found his way out of it using a dropout program and his enthusiasm for his job: “Gastronomy was my salvation,” he says.

“Fortunately, I never liked going on vacation.”

Oliver Riek

But he can also tell about the dark sides of his industry in just as much detail. As he walks through St. Georg, filled with cafes, bars and restaurants, he knows a story about many of the shops. He has been blogging for a while, has written two books, he is a trade unionist and left-wing politician; some stories were brought to him, others he experienced himself. They are about unpaid overtime, about innkeepers being generous to their customers but all the more petty towards their employees, and the argument about a fair distribution of gratuities. “You always live on the edge of this industry,” says Riek.

A small budget for each day

When the new federal government announced it would raise the minimum wage to 12 euros by the end of the year, it seemed like a victory to him. But now, he says, inflation is eating it all up again.

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Riek now divides his money into small portions. So he does not lose track. He now has a little over 20 euros per. day. How much can he spend? Last weekend he was with his son at the Dom, the Hamburg fair. “There were 50, 60 euros away in no time.” So that means: Do not spend two days getting your money back. He hardly needs to hope for a tip in his new job, as he is usually behind the counter, “system gastronomy”. Butter, oil, eggs, he notices the prices very much now. And when he was recently asked to pay 10 euros for a steak of 150 grams – “I asked myself: Has it always been so expensive?” He did not take it. And travel? “Fortunately, I have never liked going on vacation,” Riek says.

Fuel oil is at the top of the list of things that have become more expensive: 107 percent more than a year ago, according to the Federal Statistical Office. Diesel: at 63 percent. Fantastic: 42 percent. Sunflower oil: 30 percent.

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Women’s shoes do not heat up

There are also things that have become cheaper. Electric mixers cost 3.3 percent less than a year ago. Or women’s shoes: minus 1.3 pct. But women’s shoes do not heat up the apartment.

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It is inflation on paper. But they are also in the mind. Since it is not so clearly measurable. But it still has an impact. Economists are even cautiously optimistic for the coming year. They assume an increase of 2.8 per cent. But it is a forecast with many unknowns. Above all, the question of when the war in Ukraine will end. Ultimately, how inflation works is always a matter of expectations. And then Dominic and his girlfriend are now wondering if they should really have a child – if they should dare. He already wonders if he, given the prices and wages, would be able to support a family. “And at the moment I want to say: It’s getting tight.”

The gym is also getting more expensive

Dominic is in his mid thirties, the question is now up to him. He works in a logistics center, responsible for larger customers, he even leads a small team. Nevertheless, he and his colleagues earn only between 1300 and 1800 euros. He says he would not count himself among the middle class.

Anyone who talks to him about inflation hears many examples. The fitness center, for example, which is already one of the cheapest, but currently goes from 20 to 25 euros. The vegetarian food that he and his girlfriend buy more and more often for health reasons, but which, he thinks, has just become more and more expensive. And when they recently planned their summer vacation, they quickly abandoned their original idea. According to the consumer index, the price of travel rose by 11.5 percent in March. But what does that mean? They actually wanted to go to Crete. Now they are going to the Baltic Sea.

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Can they save somewhere? The biggest factor, Dominic says, is gasoline? He used to fill his Ford Ka, a small car, for 50 euros a week. Now he pays 80. But when it comes to the car, he feels like so many others as a prisoner of the circumstances. The early shift starts at To be there on time, he had to take the first bus at 4:50. It takes 20 minutes by car. But 30 euros difference per week? “It really hits the spot.”

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Greek once a month

Go to the Greeks, they used to do that more often. Now only once a month. It saves, but changes the feeling a little.

The federal government has decided on two emergency aid packages. This is a controversial move among economists, because if everyone can afford higher prices than before, it could drive inflation further. On the other hand, the two emergency aid packages would “cover the extra social burdens to a significant extent,” judge Sebastian Dullien and Silke Tober from the Department of Macroeconomics and Business Research.

But the more crucial question is whether they can also change the way people feel. Whether they change the impression that everything is simply getting more and more expensive. If they can bring something like confidence back. Logistics employee Dominic is skeptical. He supposes, he says, “that it will not do much good.” Something else would be more important to him: significantly higher wages. Which, of course, made the video an overnight sensation.

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In return, Oliver Riek will also advocate the abolition of gratuity – so this should no longer be used as an excuse for poor pay. During the pandemic and his unemployment, he tried a completely different antidote: he changed jobs – and started as a bus driver. However, he quickly gave up. “Sitting for eight hours,” he says, “was just not my thing.”

Germany and the money

In our series, we describe how rising prices affect our lives. And give tips on what we can do about it.

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