• Germany's news in English
 
app_header_v3
Experts warn of rising inequality in Germany
Photo: DPA

Experts warn of rising inequality in Germany

DPA/The Local · 18 Mar 2016, 11:23

Published: 18 Mar 2016 11:23 GMT+01:00

The study by the Kreditanstalt für Wiederaufbau, a government-owned development bank, shows how unevenly the fruits of prosperity have been divided over the past decade and a half.

Whereas in 2000 Germany had arguably the lowest income inequality in the world, it has now fallen behind the Czech Republic, Sweden and Denmark.

The report does however emphasise that Germany is still one of the most equal countries in the world when it comes to disparity in earnings, due to its progressive tax system.

The figures show that, whereas in 2000 the top 20 percent of earners were taking in 3.5 times the amount of those in the bottom 20 percent, that ratio has now increased to five times.

Earnings in the bottom ten percent of German society actually decreased significantly in real terms across this period, with an increase in earnings of 6 percent clearly being outpaced by a 24 percent rise in consumer prices.

In contrast the top of German society saw earnings increases of 39 percent.

A tweet from broadcaster ARD, shows that income among top earners has increased by 39 percent while those among bottom earners increased by only 6 percent.

Germany’s Gini coefficient - a widely used indicator of economic inequality - has grown significantly over the past 15 years.

A Gini coefficient of zero represents absolute equality, while one represents absolute inequality. Eurostat figures for Germany show the country's Gini coefficient rose from 0.25 to 0.31 between 2000 and 2014.

Now the Czech Republic has claimed the title of the country with the lowest income inequality globally, having achieved a 0.25 Gini rating in 2014. But at 0.31, Germany has fallen into line with the EU average.

According to the report the cause of this growth in inequality is to be found in the different speeds at which salaries have increased.

Sixty-two percent of German income is provided by salaries, 23 percent come from redistribution programmes such as welfare and pensions, and 10 percent comes from returns on assets.

Story continues below…

In the top-earning group (€5,000 to €18,000 after tax per month) more than 70 percent of income comes from salaries.

But in the lowest-earning category (after-tax earnings of up to €1,300 per month) 65 percent of household income is made up by welfare payments.

This has a huge effect on disposable income. While top earners are able to save 40 percent of their income each month, bottom earners do not take in enough to cover living costs and fall into debt.

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

DPA/The Local (news@thelocal.de)

Your comments about this article

Today's headlines
Trabi totalled on Autobahn after skidding on snail slime
Photo: Paderborn police

A vintage East German "Trabi" car has come unstuck after its driver hit a snail trail on the Autobahn.

Munich 'to spend extra €2.2m' on Oktoberfest security
Oktoberfest in Munich, 2014. Photo: DPA.

After terror attacks in Paris, Brussels and most recently Istanbul, Munich could spend nearly €3 million more on security and other measures - but terrorism isn't the only concern: the biggest fear is overcrowding.

The Local List
Six ways to make this Munich summer one to remember
The Kocherlball in the English Garden. Photo: DPA

At a loss for what to do with the warm months in Munich this year? These six attractions have to go on your summer bucket list.

Brexit vote
Germans rally on Twitter to show love for UK
Photo: DPA

Twitter was swamped with tributes after Germany's largest liberal newspaper asked readers to show some love for Britain despite its vote to leave the EU.

German kidnaps Swiss child, raising online gaming fears
File photo: Rachel Johnson / Flickr Creative Commons.

A 12-year-old Swiss boy was allegedly abused by a German man he first met online.

'Hero' refugee hands in €150,000 he found in wardrobe
Muhannad and the secondhand wardrobe. Photo: Minden Police.

A refugee from Syria found a huge stash of money in a secondhand wardrobe he bought. But keeping it for himself would have been a betrayal of his religion, he said.

Istanbul airport bombing
Flights from Berlin to Istanbul cancelled after terror attack
Turkish police block the road after an suicide bomb attack at Atatürk Airport in Istanbul. Photo: EPA.

All flights from Berlin's Tegel airport to Istanbul have been cancelled after a suicide bomb attack killed at least 36 people in the city's major airport.

German extremist groups 'getting bigger, more brutal'
A violent demo in Frankfurt in 2015. Photo: DPA

Political extremism rose sharply in Germany last year - among far-right but also far-left and Islamist radical groups - the domestic intelligence agency said Tuesday.

Berlin puts spies on tighter leash after NSA scandal
An installation of the BND in Bavaria. Photo: DPA

Germany on Tuesday approved new measures to rein in the activities of its foreign intelligence agency after a scandal over improper collusion with the US National Security Agency.

Brexit vote
There's no way back for Britain, says 'sad' Merkel
Angela Merkel (r) and David Cameron in Brussels. Photo: DPA

Chancellor Angela Merkel said at the EU summit in Brussels late on Tuesday that she didn't see any way that the British decision to leave the EU could be reversed.

Sponsored Article
Avoid hidden fees when sending money overseas
National
How to get German citizenship (or just stay forever)
Sponsored Article
Why you should attend an international job fair
Technology
Brexit will turn Berlin into 'Europe’s startup capital'
International
'Germany needs to make UK come to its senses'
Sponsored Article
Education abroad: How to find an international school
Features
Six odd things Germans do in the summer
Sponsored Article
Health insurance for expats in Germany: a quick guide
Travel
These 10 little-known German towns are a must see
Features
How two gay dads cut through German red tape to start a family
National
Five things to know about guns in Germany
Sponsored Article
US expats: Taxes are due June 15th
Culture
10 things you need to know before attending a German wedding
National
Eight weird habits you'll pick up living in Germany
Lifestyle
Six reasons 'super-cool' Berlin isn't all it's cracked up to be
Society
Only one country likes getting naked on the beach more than Germany
Lifestyle
23 ridiculously fascinating things you never knew about Berlin
Culture
8 German words that perfectly sum up your 20s
Lifestyle
Can't make it past the door at Berlin's most famous club? Help is at hand
Business & Money
Why Frankfurt could steal London's crown as Europe's finance capital
Features
6 surprising things I learned about Germany while editing The Local
Culture
Five sure-fire ways to impress Germans with your manners
Features
6 reasons Germany's summer is unbeatable for thrill-seekers
National
The future belongs to these 10 German regions
7,865
jobs available
Toytown Germany
Germany's English-speaking crowd