• Germany's news in English
 
app_header_v3

Germany has 'greatest inequality in eurozone'

The Local · 27 Feb 2014, 17:21

Published: 27 Feb 2014 17:21 GMT+01:00

The report, from The German Institute for Economic Research and the centre-left Hans-Böckler Foundation, found that living in the former West Germany meant you were more than twice as rich than in the East, with average wealth of €94,000 compared to €41,000.

This disparity is mainly due to the difference in house prices in the two regions, the study said.

It calculated personal wealth by adding up savings, property, insurance and jewellery, but did not include the value of cars or cash.

Gender also played a significant role in wealth distribution, with the average man €27,000 wealthier than the average woman.

Researchers found that the distribution of wealth in Germany was, along with Austria, the worst among all eurozone countries.

Germany has consistently received a rating of 0.78 on the Gini co-efficient, well above the majority of European countries.

The Gini coefficient measures overall inequality, where one denotes maximum inequality and zero signifies no inequality.

"Overall not much has changed in wealth distribution - inequality remains high," Markus Grabka, researcher at the German Institute for Economic Research said.

Researchers recognized that the wealthiest in Germany were not always fully represented in the figures.

"In effect this means that the true extent of wealth inequality is underestimated," Grabka and fellow author Christian Westermeier added. 

The richest one percent of Germans have on average at least €817,000 in personal wealth, an increase from €787,000 five years ago.

Those who own more than €217,000 find themselves in the top ten percent.

SEE ALSO: How should expats invest in Germany?

However, 28 percent of the German adult population have no assets whatsoever, or are in debt.

And these inequalities remain despite increases in overall wealth. The net value of all German assets in 2012 was €6.3 billion, €500 million more than five years ago.

If net private wealth was to be shared equally between all Germans, the average citizen would own €83,000.

Work = wealth

The sharp divide in German society runs right through the job market.

The numbers reveal that those who are jobless lose out the most. In 2002, the average unemployed person owned around €30,000 but by 2012 this had dwindled to €18,000.

By comparison, the average wealth of a self-employed businessman with ten or more employees is €952,000.

Interns and those still in academic or vocational training come at the very bottom of the job tree, with just €8,000 in wealth.

At the other end of the spectrum, managers are each worth more than four times as much as a skilled worker, holding an average of €210,000 compared to €45,000 for the latter group.

The family situation also has an effect on wealth. Parents are financially better off if they're a couple, although the rule remains that the more kids you have, the fewer assets you also have.

Childless couples have an average of €108,000 per person, while couples with a child have €62,500 per person - 42 percent less.

In two-child families each partner is worth an average of €50,500 and with three children that drops to €44,000 - less than half the assets of the average couple with no children.

There are solutions to the wealth distribution, researchers suggest. The authors of the report called for higher taxation on earnings. 

SEE ALSO: Are Germans really poor in European terms?

For more news from Germany, join us on Facebook and Twitter.

The Local (news@thelocal.de)

Your comments about this article

Today's headlines
The Local List
13 (even more) thrilling facts you must know about Berlin
Berlin, du bist so wunderbar. Photo: DPA.

Berlin is just so gosh darn interesting, we couldn't fit it all into the first list on our website of infinite virtual space.

1000s of smashed beer bottles bring Autobahn to standstill
The clean up near Bayreuth. Photo: DPA

The main road artery between Munich and Berlin was completely shut down on Tuesday evening after a truck driver committed a cardinal sin.

Far-right leader Petry under investigation for perjury
Frauke Petry. Photo: DPA

Her right wing populist party’s electoral successes have struck the fear of God into the political mainstream. But Frauke Petry is now under investigation in Dresden for perjury.

We'll crush German airlines, boasts Ryanair boss
Michael O’Leary. Photo: DPA

Ryanair boss Michael O’Leary has told a German newspaper that German rivals Air Berlin and Eurowings are doomed.

All aboard the €3,000 train ride from Berlin to London
Hercule Poirot on the Orient Express. Photo: Arte/DPA

One imagines that there is more than one Londoner who has moved to Germany in pursuit of Christopher Isherwood’s Berlin. Now they have the chance to travel like him, too.

Adidas to bring production home with robot shoe factory
File photo: DPA

Adidas, the German maker of sportswear and equipment, announced Tuesday that it will start marketing its first series of sportshoes manufactured by robots in Germany from 2017.

Passersby spur on mob as they attack refugees
File Photo: DPA

When four refugees were attacked near a tram stop in a town on the German-Polish border on Monday evening, pedestrians egged on their assailants.

Pegida enraged by black children on chocolate bars
Screenshot: Facebook

Members of anti-Islam group Pegida were outraged this week to see photos of black and Middle Eastern children on packets of Kinder chocolate bars – until they found out who the kids really were.

Germany gets its way over fresh aid for Greece
Finance Minister Wolfgang Schäuble appears to have got his way at a Brussels showdown. Photos: DPA

Greece will get extra cash in the coming months to cover its debt repayments – but there'll be no cut to the total amount before the next elections in Germany.

Five sure-fire ways to impress Germans with your manners
Chancellor Angela Merkel showing up French President François Hollande in a neighbourly battle of table manners. Photo: DPA.

Despite what stereotypes might have you believe, Germans aren't that different from the rest of us when it comes to social interactions. But these tips should at least help guide you through the minor quirks that come with your next dinner invitation.

Sponsored Article
Eat, learn, live: unforgettable holidays in France
Lifestyle
6 things about Munich that will stay with you forever
Technology
Church plans to connect with faithful at Wi-Fi 'Godspots'
Technology
Online hate speech can cost users thousands of Euros
Society
Bavarians in rush for non-lethal weapons licenses
Sport
Here's Germany's Mannschaft for Euro 2016
Culture
The Syrian pianist playing his way into Germans' hearts
The parrot who flew fast enough to trigger a speed camera
Business & Money
Surprise results give Germany strongest growth in two years
Technology
New law could let free Wi-Fi bloom across Germany
Politics
Berlin's plans to beef up the German army
Munich
The bloody knife attack that shocked a Bavarian town
National
Supermarkets must pay massive fine for fixing beer prices
Sport
Lufthansa's Euro 2016 ad takes aim at England
Culture
The 6 German words you need to know for spring
Culture
6 weird and wonderful ways Germans celebrate May 1st
Gallery
Feast your eyes on Germany in springtime bloom
National
4/20: Five things to know about weed in Germany
Berlin
Police break up hipster swarm at vegan restaurant opening
Politics
Merkel allows Erdogan case against German satirist to go ahead
Travel
7 of Germany's most jaw-dropping national parks
7,800
jobs available
Toytown Germany
Germany's English-speaking crowd