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Anxious middle class shrinks as gulf between rich and poor grows

The Local · 15 Jun 2010, 12:57

Published: 15 Jun 2010 12:57 GMT+02:00

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The German Institute for Economic Research (DIW) research showed the number of both poor and rich households growing in absolute terms – and for the last 10 years the impoverished households have become progressively poorer.

The polarising trend, studied between 2001 and 2009, means that the middle class has fallen from 64 percent to only 60 percent of German society in the past decade.

“On the one side the number of people living in luxury is growing, while on the other side the number of those who must live with low incomes, or are even poor, grows,” DIW researchers wrote.

This is creating a “status panic” within the middle class, they said.

Low incomes, according to the DIW, are those that have a take-home pay of less than 70 percent of the average net salary. For a couple with two children younger than 14, this would equal €1,800 including state parental benefits after taxes.

In 2000, some 18 percent of German households fell into this group – but jumped to 22 percent in 2009, the DIW found.

Meanwhile the wealthy – or those who take home above 150 percent more than the average income (€3,870) are multiplying. Their numbers grew from 16 to 18 percent in the same time period, though there was a slight reduction following the financial crisis.

The development is dangerous for social stability, the DIW told the paper.

“Particularly among the middle class, whose status depends on income and not assets, there is a sensitivity to developments that threaten this status,” the paper quoted, adding that this could fuel xenophobia among those looking for a scapegoat.

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With this in mind, the DIW experts were highly critical of the government’s recent decision to cut spending with a record austerity package, which aims to slash €80 billion from the budget by 2014, including €11.2 billion next year, much of it from social welfare benefits.

DIW economist Jan Goebel said it was inappropriate for the “concrete suggestions of the savings package to actually only affect the lower income levels,” raising the question as to “just why the people with higher incomes mustn’t bear any of the savings.”

The Local (news@thelocal.de)

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Your comments about this article

15:22 June 15, 2010 by lickmyamericanballs
It has nothing to do with the 800,000 immigrants from the middle east pouring into germany, oh no! Just like the rich/poor gap in the United Stated has nothing to do with the 2.5 million immigrants from south of the border.
15:38 June 15, 2010 by Clapoti
Let's just cut the social welfare benefits and not raise taxes on the rich... that should fix the problem.
15:57 June 15, 2010 by rogerpaul
I do hope that the comment above is meant as irony.

The best way would be to raise taxes, and end German involvement in the war in Afghanistan. After all, the Soviets bit the dust there, what hope does a handful of German troops have? Leave the American war to the Americans.
00:17 June 16, 2010 by hillelmoses
Unfortunately the first person to comment here is not being ironic. He is just a simple AND EVIL idiot who has drunk the milk of the financiers' DREAM of immense wealth. So, after the economic crisis caused by the speculation of private banks, etc., with all the political class in cahoots with them EVERY STEP OF THE WAY and doing their bidding (to the point of saving their fat arses with the financial rescue packages) we are now going to see real cutbacks in government programs for the poor, and the collapse of wages for most people with the rich getting richer! Of course this won't work either. Why? Because the fat arses capitalists will keep speculating and creating financial bubbles that are not economically productive. Because they have forgotten how to create real wealth and just know how to manipulate the political system, the financial system, AND CORRUPT BOTH OF THEM. So, a vicious circle is going to be created in which the Western World will descend into further and further economic crises. I hope that this type of thing will not bring back Communism as an ideological solution. That didn't work either and created horrendous oppression and class war! ALREADY WE SEE LEFTIST IDIOTS TORCHING EXPENSIVE CARS ALL OVER GERMANY! A SIGN OF THINGS TO COME? The only way to get out of this dead end is to basically bankrupt the financial system, starve the bankers from capital, and break the links between the political establishment and the rich. Let the rich and the parasite banks be ground up in bankruptcy with nobody and no governments to help them out. Let the majority of the people see such individuals for what they currently are: FRAUDSTERS AND MANIPULATORS OF THE FINANCIAL AND THE POLITICAL SYSTEM AND PEOPLE THAT ARE TO BE DESPISED AS WELL AS THE WAY OF LIFE THAT THEY PREACH! Only then can we begin all over by adopting shared austerity (and no luxuries for a decade or so) for all where we will build the economy on a foundation of savings and shared sacrifice. And because the bubble economy of the rich will have crashed down prices will have come down to the point where people can save in order to build up the economy again. This is the only answer and not the simple idiot's deluded WOULD-BE RICH FANTASY AND CONTEMPTUOUS ELITISM REGARDING ANYBODY WHO DOES NOT SHARE IN HIS RICH PEOPLE'S IDEOLOGICAL GARBAGE!
07:59 June 16, 2010 by Clapoti
Whatever the guy above says, I was being ironic.
09:13 June 16, 2010 by dbert4
hillelmoses - Amen brother!
10:09 June 16, 2010 by mrsams
good time is over, we just face the pain to come.
21:07 June 17, 2010 by Logic Guy
Well, history has clearly proven that a huge, socio-economic imbalance is not good for anyone. At some point, the misery of the poor circles back around and strikes the wealthy. The universe itself is an extraordinary system that is based up a very high degree of balance.

Humans will always encounter problems, as long as they try to live outside of the laws of the universe. Albert Einstein once said "Only a fool expects a different answer from the same equation."
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