Cologne / Berlin (dpa) - According to a study, inequality in income and wealth in Germany has not increased further in recent years.
Since 2005, inequality in disposable household income has fluctuated at an almost unchanged level and, according to current data, was not significantly higher in 2017 than in 2009. This is the result of a study by the employer-oriented Institute of German Business (IW) in Cologne . The distribution of net assets also turned out to be remarkably stable.
"In view of the social challenges of recent years, this can be seen as a success," write the IW researchers. The relatively high low-income rates in eastern Germany and people with a migration background are also critical
For years, there have been different views on the distribution of income and wealth in Germany. It is considered largely indisputable that inequality had risen sharply by 2005. By contrast, there was disagreement over the following years. For example, the Economic and Social Sciences Institute (WSI) of the Hans Böckler Foundation, which is close to the union, determined in a study presented in autumn 2019 that the gap between the wealthy and lower income groups had widened in recent years. Other economists like the IW, on the other hand, say that the level has largely stabilized.
According to the IW study, real household incomes rose by an average of 20 percent between 1991 and 2017. Since 2013 at least, almost all income groups have benefited from it. Between 2013 and 2017 alone, average and median real household incomes rose by around 7 and 9 percent. But the bottom 20 percent would also have seen real income growth. Available household income is the amount of money that can actually be spent every month.
The general level of inequality is measured using the so-called Gini coefficient. This takes values between «0» and «1» - whereby «0» means that everyone has the same amount; with a value of "1", a single person owns everything. According to the IW, income inequality has been relatively constant since 2005, at a comparatively low 0.29 points - even though the immigration of refugees is reflected in the data.
Between 2009 and 2017, according to the IW study, around 60 percent of people from the lowest income group made it to the top. "Since 2013 we have been seeing relatively large increases in income, especially in the lower and middle range," said IW distribution expert Maximilian Stockhausen.
However, there is still a need for action: 16 percent of people are at risk of relative income poverty, meaning they have less than 60 percent of median income at their disposal: “The value has hardly changed in recent years,” it says. With regard to the low income rate, there are big differences between East and West and even bigger differences between people with and without a migration background. Furthermore, unemployment and unemployment were by far the greatest low-income risk.
The net assets are the actual assets, i.e. the value of houses, cars or shares less debts and mortgages. According to the IW, the distribution of net assets in Germany has been stable since the mid-2000s. On average, the Germans had around 233,000 euros in net assets in 2017. The budget, which was in the middle of the wealth distribution, came to a net worth of 70,800 euros. In view of the data, it is currently not possible to speak of a steadily increasing unequal distribution of net assets, despite the uncertainty about estimates.
A radical proposal comes from the left-wing thinker and economist Thomas Piketty: According to “Spiegel” and “Frankfurter Allgemeine Sonntagszeitung”, he suggests that every adult on his 25th birthday receive a government gift of 60 percent of the average wealth. In Germany, that would be 120,000 euros. With the money - a one-time inheritance - a property can be paid for, something founded or an education financed. The money for this should come from income from a wealth tax of up to 90 percent. A new book by the bestselling author Piketty will appear shortly in German.
IW Distribution Report 2020
WSI study from October 2019