Wage inequality in Germany now at same level as a century ago: study

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Wage inequality in Germany now at same level as a century ago: study
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The best-selling French economist Thomas Piketty released a study on wage equality across the globe on Friday. His team found wages in Germany were as unequal as before the First World War.


The top 10 percent in Germany earn 40 percent of overall income, the study found.

“This proportion has been growing since the middle of the 1990s,” said Charlotte Bartels from the  German Institute for Economic Research (DIW), which studied the German data.

“The bottom 50 percent have lost out significantly in recent years in terms of their cut of the overall income. In the 1960s they earned a third of the total, now that has dropped to 17 percent,” Bartels said.

But she also added that “if you include social transfers, which aren’t revealed in data on pre-tax income, the numbers for the lower earners are probably better.”

Meanwhile the percentage of overall earnings taken home by the middle classes has remained relatively stable at 40 percent over the past six decades.

“On the whole wage inequality is neither radically lower or higher than a century ago. But it has increased since the turn of the century,” said Bartels.

The study found that income inequality had grown all across the globe, with the most dramatic differences being seen in North America, China, Russia and India. Europe had the lowest proportion of income lying in the hands of the top 10 percent in the world.

The economists say that the privatization of industry has been the main culprit for the growth in this inequality.

Through the sale of publicly owned organizations into private hands “governments have lost their ability to counteract inequality,” the economists write.


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