Who is hardest hit financially by the pandemic in Germany?

Who is hardest hit financially by the pandemic in Germany?
File picture shows a mother and child in western Germany. Photo: DPA
The pandemic has affected everyone in Germany in many ways. Here's who is being hit hardest when it comes to economic difficulties.

From Kurzarbeit (reduced hours) and homeschooling to hardship and health issues – the coronavirus crisis has deeply shaken the population in Germany. The effects can be seen in almost all areas of society, a report by the WZB Berlin Social Science Centre shows. 

The results of the Data Report 2021 – A Social Report for Germany – primarily cover the first shutdown in spring 2020 until the summer of 2020, giving a snapshot of the effects of the pandemic. Germany has currently been in a shutdown since November, although there are plans to reopen public life.

The first lockdown in March 2020 resulted in an unprecedented economic crash. In the second quarter, gross domestic product (GDP) fell by almost 10 percent, and private consumption slumped by 13 percent, reported Welt.

Sectors particularly affected, such as restaurants and hotels, lost almost 90 percent of their turnover during the ordered closure. Mobility also fell abruptly by a third in the spring as a result of the ordered contact restrictions. Air traffic came to an almost complete standstill for months.

How is the pandemic impacting people?

In the first pandemic phase, higher income groups experienced more frequent income losses. But for the people with low incomes, the financial consequences were harder.

In interviews, 17 percent of semi-skilled and unskilled workers and just under 14 percent of employees without a degree reported being affected by financial difficulties, or expect this to happen in the next year.

In skilled, master and qualified occupations, the figure was only nine percent.

Single parents (25 percent) and the self-employed (20 percent) were the most affected. People with a migration background (15 percent) were almost twice as likely to speak of money problems as people without this background (eight percent).

Furthermore, people in the lowest income groups were more likely to have lost their jobs during the first shutdown. And employees in the lowest income groups were also less likely to be able to work from home compared to those who earn more.

What about the general picture on poverty in Germany?

According to the report, the risk of falling into poverty in Germany is highest among single parent households (41 percent), people with a lower secondary school leaving certificate without a vocational qualification (35 percent), and in those with a direct migration background (29 percent) – people who have immigrated to Germany.

The study found German residents who have fallen into poverty are increasingly getting stuck in this situation for a longer period of time compared to previous years.

For several years the gap between rich and poor increased significantly in Germany. Now the structure of poverty has changed.

READ ALSO: How new poverty ‘problem regions’ are emerging in Germany

In 2018, almost one in six (15.8 percent) people were living below the poverty risk threshold. At the end of the 90s, it was just under 11 percent.

“We see that households that once slipped below the poverty line remain below the poverty line more often and also for longer,” Philip Wotschack, a researcher at the WZB and one of the authors of the report, told Spiegel.

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According to the report, 88 percent of people who lived in relative income poverty in 2018 had already been affected by poverty for at least one period of time in the previous four years – and just under 44 per cent of them had been permanently poor during this time.

Structurally weak areas in the west – such as the industrial Ruhr region (Ruhrgebiet) in North Rhine-Westphalia, Germany’s most populated state, also show an increased risk of poverty, as does eastern Germany – more than 30 years after reunification.

READ ALSO: ‘Nearly three million’ children in Germany live in poverty

People are said to be at risk of poverty in Germany if the net household income is less than 60 percent of the country’s median income. In 2018, this threshold was around €1,040 per month for a one-person household, and €1,352 for single parents with one child.

Meanwhile, people in the Bundesrepublik are becoming more frustrated about the income gap. Only just under half of the population feels that their own gross wages are fair, the report found.

Almost 75 percent of western Germans are now in favour of the state taking action to reduce income disparities. In 2002, it was still less than half. In eastern Germany about 80 percent of people want the government to do something about it.

The study has been published jointly by the WZB, the Federal Statistical Office and the Federal Institute for Population Research every two years since 1983.

The data aims to paint a comprehensive picture of living conditions in Germany. It combines official stats with social research including interviews with people affected.

Vocabulary

Poverty – (die) Armut

Single parent household – (der) Alleinerziehenden-Haushalt

Migrant or migration background – (der) Migrationshintergrund

The gap between rich and poor – die Kluft zwischen Reich und Arm

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.


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