Why is the middle class shrinking

Distribution of wealth in Germany : The middle class is shrinking - and isolating itself

It shapes German society. Is considered a success factor of the social market economy. The middle class. Those who have little want to move up. This includes. Those who have made it do not want to lose their place. But both will be more difficult.

Germans have more and more incomes. The difference between rich and poor has seldom been as great as it is today. This is shown by a study that the union-affiliated Hans Böckler Foundation recently presented in Berlin. Her verdict: "For the middle class, the risk has grown to decline financially."

Just why After all, the German economy is doing well. The companies' order books are full and the business outlook is optimistic. The German government estimates that the German economy will grow by 1.6 percent this year. Despite the financial crisis, the number of unemployed has halved in the last ten years. Just this week, the Federal Employment Agency reported a new record for the workforce: 43.5 million Germans have jobs - more than ever since reunification.

Why society is drifting apart

Everything is fine, one might think. But there is a catch: Just because more Germans have jobs doesn't mean that individuals are better off. "The number of those who earn badly is increasing," says sociologist Cornelia Koppetsch from TU Darmstadt. In other words: more people have jobs - but one in which they don't earn much. That divides society. And it reinforces a development that economists have long observed and lamented: the poor are getting poorer, the rich richer.

The richest one percent of German citizens now own a third of German wealth. This is shown by a study by the German Institute for Economic Research (DIW). It gets even more extreme if you look at the top alcohol level - this corresponds to around 40,000 households. Together they own more than 17 percent of total assets. The poorer half of Germans, on the other hand, share a fortieth.

In Germany, wealth is particularly unevenly distributed

It is true that the rich in France, Greece or Spain also own a lot more than the average citizen. However, according to the DIW analysis, the extreme discrepancy is a specifically German phenomenon. Nowhere in Europe is wealth inequality as high as here.

And a trend reversal is not in sight. Although wages have risen in recent years, incomes are drifting further apart, as data from the Hans Böckler Foundation show. There have only been increases in the top wage range, with the lower 40 percent having declined available wages over the past 15 years. "The very rich are literally floating above the economic crises," says author Dorothee Spannagel. The wealthy also benefit primarily from the good economic development. The upswing is bypassing those who earn little. The Gini coefficient - the statistical mean for unequal distributions - currently measures a value that is 15 percent higher than in the early 1990s.

The researchers interpret the numbers differently

If the group of the poor and the rich get bigger and bigger, that also means: the middle is shrinking. How strong this effect is is a question of definition. That is why some scientists are almost calling out the end of the German middle class, while others think that everything is half as bad. One thing seems clear: social mobility is decreasing. It becomes harder to improve one's status in society. According to the figures from the Hans Böckler Foundation, around 35 percent of people managed to rise from the lower middle class in 1990. Today only 23 percent manage that. At the same time, more people remain poor: while around twelve percent of Germans lived in poverty in the 1980s, it is 16 percent today.

Even those who have already made it and got a well-paid, permanent job can no longer sit back and relax. "The opportunities for advancement decrease in the middle class," says Spannagel. “And the risks of relegation are increasing.” It is easier to get poor than rich.

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