The Poor Have Become Poorer Even in Germany

In Germany, the rich are becoming richer, while the poor are becoming poorer, according to a report prepared by the Ministry of Labor and Social Affairs, as reported by Reuters.

It was found that between 1995 and 2015, 40 percent of the workforce with the lowest incomes saw their hourly wages decrease by between 4 and 7 percent, while on the other hand, the wages of the richest 60 percent increased by between 1 and 10 percent during the same period.

The report also includes 890,000 refugees who arrived in Germany during 2015, and the ministry believes they contributed to the rise in the poverty rate. It was also mentioned that it was not possible to quantify the impact that refugees had on poverty, given that data on new arrivals is scarce.

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It states that the influx of refugees has led to an increase in people seeking vocational training, which is beneficial for an economy suffering from a labor shortage in most, if not all, sectors.

The report also refers to a study conducted by the Institute for Economic Research in Cologne, which states that if refugees make up 1 percent of the German population, which numbers 82 million, and have wages below the minimum wage, poverty will increase by 0.7 percent.

Child Poverty

The conclusion of the report is that poverty has increased by 6 percentage points among individuals born in the 1980s compared to those born in the 1970s. It is also noted that between 15 and 21 percent of children in Germany are facing the threat of poverty.

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The SPD Chancellor, Martin Schulz, whom the media calls Robin Hood, has revived his party’s ratings by promising to reverse the labor market and social welfare reforms introduced by former SPD Chancellor Gerhard Schroeder in 2003, which are believed to adversely affect the poor.

These reforms saved Germany from years of stagnation and made the economy more competitive. The German economy has grown every year since 2010, including last year’s growth of 1.9 percent. Angela Merkel’s conservatives do not want to comment on the report as it has not yet been officially released, and it is expected that they will deny some parts of it.

Germans Divided

A survey conducted by Deutschland Trend revealed that 44 percent of Germans believe there is inequality in society, compared to last month when 50 percent felt that way.

-We must ensure decent wages. This particularly applies to the services and care sectors. This will be an important step to bridge the gap between wages and the divide in society, said SPD Secretary General Katarina Barley.

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A recently published study conducted by the RWI Leibniz Institute for Economic Research reveals that one-eighth of the population, or 7.5 million Germans, are working in poorly paid jobs, earning less than the legally mandated minimum wage of 8.5 euros per hour.