Salary inequality is increasing significantly in Germany

Poverty in Germany has increased significantly over the past ten years - and the "social stress test" continues due to record inflation and the corona pandemic. This was the result of the new distribution report published on Thursday by the Economic and Social Science Institute (WSI) of the Hans Böckler Foundation of the German Trade Union Confederation (DGB).

The study also shows how much permanent poverty in Germany restricts social participation even in economically stable times.

The financial deficit of households below the poverty line compared to the average income of the entire population had grown by a third compared to 2010 even before the start of the Corona crisis. The inequality of income in Germany as a whole reached a new high in 2019, the distribution report also showed.

According to the WSI, the study also shows how much permanent poverty in Germany restricts social participation even in economically stable times. Poor people, for example, have to do without everyday goods much more often, such as basic clothing or shoes, they are less likely to be able to heat properly and live in smaller living spaces. "They have poorer health, fewer educational opportunities and are less satisfied with their lives."

For many of those affected, this leads to an increased distance from the political system: According to the report, only 68 percent of people below the poverty line consider democracy to be the best form of government. Only 59 percent think democracy in Germany works well. "Poverty and social polarization can shake the foundations of our democratic coexistence, especially when they become entrenched," said WSI director Bettina Kohlrausch.

"More and more effective political commitment against poverty is therefore not only necessary to help those directly affected, but also to keep society together."

This is all the more true "because in times of high inflation, there is also a risk of social decline for people who have had little to worry about over the past decade". In this context, Kohlrausch welcomed the introduction of citizen income.

In the new distribution report, the WSI evaluated the latest available data from two representative surveys: Firstly, from the socio-economic panel (SOEP), for which around 16,000 households are interviewed every year and which currently extends to 2019. On the other hand, from the life situation study of the Hans Böckler Foundation, for which a good 4000 people were surveyed in 2020 and 2021.

In addition, according to the information, there is data from a representative survey carried out by the Institute for Macroeconomics and Business Cycle Research (IMK) of the foundation in August 2022 on the burden of inflation.

According to the usual scientific definition, the researchers define poor as people whose needs-weighted net income is less than 60 percent of the median income in Germany.