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Income distribution: Poverty takes chances for the future

2019-11-08T15:00:50.375Z

The inequality of disposable income in Germany continues to increase. This is a problem because it goes hand in hand with an increase in the risk of poverty.



Inequality of disposable income in Germany has reached a historic high. When the Hans Böckler Foundation recently showed this in an analysis, it was heavily criticized by some: the increase in inequality was an artefact of various circumstances and especially the immigration of refugees owed; This circumstance would obscure the fact that in Germany, since the economy is booming again, all income groups are clearly better off.

How justified is this criticism? If we take a closer look at the individual arguments, we see that the objections are largely unfounded and, above all, the rise in the risk of poverty is a massive problem - not just for the people affected, but for society as a whole.

The objection that the increase in inequality of disposable household income is merely the result of immigration of refugees is not only wrong but also cynical. Even without refugees, inequality has increased, as the graphic of the Hans Böckler Foundation shows based on data from the Socio-Economic Panel. And how cynical is it to say that an increase in inequality is less problematic because it affects "only" certain groups?

The employment rate has increased significantly in the past ten years

The distribution is basically about the question of how the cake, so the performance of the entire society is distributed among its members. And should not every human being, regardless of gender, age, background, education or place of residence, count the same and have the same weight in our liberal democracy? Our Basic Law leaves no doubt about that.

Many critics have justified the increase in inequality by 2005 and beyond, mainly because more women are gainfully employed but often earn lower wages and incomes than men. Of course it is important to understand how inequality is composed and changed. Only in this way can causes and possible solutions be identified. However, the point remains that an increase in inequality is no less problematic, "only" because certain groups are more affected than others.

A second objection in the debate is that the increase in income inequality in Germany is not surprising, as refugees and other migrants are now much more often (at least initially) not working. The smaller the share of the working population in the total population, the higher the tendency is also the inequality of household incomes. But even this argument can not in fact be substantiated: In fact, the employment rate in the past ten years in Germany has increased significantly, especially because many women and older people are increasingly working, but also because many migrants come to Germany at working age and here work, especially from other European countries. According to this logic, the inequality of household income would rather have fallen.

It is further argued that the high and increased inequality is not a problem, since many people in the lowest income groups only earned little temporary and then soon made the ascent. A trainee may have little income, but she has a good chance of earning a better income with the first job and thus gaining promotion. This example is correct, but also misleading.

Source: zeit

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