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Germany Poverty Rate
Globally known for its engineering prowess and beautiful landscape, Germany lies in Western Europe and is undeniably one of the world’s superpowers. Although the country has experienced economic success over the past two decades, there are an unexpectedly large portion of people living below the poverty line. In fact, in 2015 the Germany poverty rate reached previously unseen levels of 15.7 percent of the population living in poverty.

Germany’s thriving economy is the fourth-largest in the world and has continued to grow with the success of its many companies, notably including Siemens Group, BMW and Volkswagen. There was even a 1.7 percent increase in GDP from 2014 to 2015.

This obvious economic development, however, has not had the expected effect of reducing poverty. The welfare organization Paritätische Wohlfahrtsverband reported an uptick in the Germany poverty rate as well as a surge in the rate at which poverty is increasing. The poverty rate in Berlin rose from 20 percent to 22.4 percent from 2016 to 2017. In fact, in 11 of the 16 German states, the number of people living in poverty has increased from the past year.

Single parents and their children are heavily affected, as 43.8 percent remain below the poverty line. Also, many of those who immigrate to Germany do not have access to a stable source of income and consequently live in poverty. Over a third of foreigners are affected by poverty. Old-age poverty has also significantly risen, with a 5.2 percent increase from 2005 to 2015, and it will only continue to rise due to the spread of job insecurity.

Even in the face of lower unemployment, Germany’s poverty rate has not decreased. This may be due to an unequal distribution of resources and wealth. The rich are getting richer while the poor are not necessarily getting poorer, but are increasing in number. The number of millionaires increased from 12,424 to 16,495 from 2009 to 2016. However, the number of homeless also increased by more than 100,000 between 2008 and 2014, and 4.17 million Germans are in serious debt.

Additionally, while the national average pay has increased by 10 percent, wages for lower paying jobs have not increased along with them. The pay for managers has also increased by 30 percent in the last 15 years, which is four times faster than wages. Thus, the problem may lie in the inadequate support of those in poorer social groups.

The booming economy may create new jobs, but these jobs pay so little that people are not able to live above the poverty line even with a stable job. Too many people work part-time jobs that don’t allow them to make ends meet. To help remedy this lack of well-paying jobs, Germany has agreed to increase its minimum wage by four percent in 2017. While the advantages of a higher minimum wage are highly debated, low-wage workers will potentially have the chance to finally climb above the poverty line.

Germany is undoubtedly one of the world’s most influential and powerful countries, but it has much work to do if it wishes to dramatically lower its poverty rate. A few examples of potentially beneficial policy actions include more emphasis on promoting the education of children from low-income areas, more targeted taxes on the rich to help redistribute wealth, financial support for single families and poor pensioners and an overall higher priority placed on combating rampant poverty.

Akhil Reddy

Photo: Flickr

Poverty in Germany

When one thinks of Germany, poverty doesn’t usually come to mind. But there are indications that poverty in Germany is a looming threat for the country of over 80 million. The influx of migrants in the past couple of years may provide a solution for the country’s low-wage labor market and aging population.

Germany’s economic and social problems are manifold.

In May 2016, the country’s Federal Employment Agency reported that one in seven children under the age of 15 were living on government long-term unemployment benefits in 2015. In some states, like Berlin and Bremen, the figure was one in three. The total number stood at 1.54 million and represented an increase of 30,000 compared with 2014.

Sabine Zimmermann, a Left Party member of the German parliament, recently argued that the issue is systemic. She also said that it lies with the country’s slack labor market. Germany’s labor market offers few jobs and low wages.

Similarly, the Bertelsmann Foundation, the largest private foundation in Germany, published a study in October 2015 which revealed that 19.4 percent of Germans under the age of 18 are at risk for poverty and social exclusion. This is the case because even though the country’s youth unemployment rate, at 7.7 percent, is the lowest in Europe, 40 percent of young people toil at low-wage service industry jobs.

Daniel Schraad-Tischler, one of the co-authors of the study, wrote that the current state of the German labor market has serious implications for the future of the welfare state. The government, he concluded, needs to create opportunities for young people to move to higher-paying professions.

One of the ways it could do this is to remove employment restrictions for foreign-born citizens.

Rather than being a burden on German society, migrants may encourage German businesses to invest at home and create jobs. Schraad-Tischler is not the only one pointing to migrants as a measure to address widespread poverty in Germany.

Christian Dürr, a German politician belonging to the center-right Free Democratic Party, wrote in a Huffington Post article that migrants will help bridge Germany’s sustainability gap.

This concept measures the amount of money needed to sustain future payments promised by the government. In 2013, Germany’s was 237 percent of its GDP, which translates to nearly 6.5 billion euros.

Among other things, the sustainability gap is a result of changing demographics.

Germany’s population is aging at the same time as it is shrinking. This means that government expenditures on health care and pensions are on the rise. But fewer and fewer people are putting money into the system.

Eventually, this would force the government to divert money from education and infrastructure in order to finance this deficit. As a result, many people would fall into poverty due to lack of future opportunities.

With the help of migration, however, the gap can be reduced to 217 percent, according to research that Dürr cited.

It is true that the gains made from migration will be modest. In addition, the government needs to pass a few necessary laws. It is also true that migration alone cannot resolve the country’s economic problems. Migrants, however, can help slow the advance of poverty in Germany by easing demographic pressures and catering to labor market demands.

Philip Katz

Photo: Flickr

german_poverty

As a country that focuses on eradicating global issues such as hunger and poverty, we must make as many people as possible aware of our efforts, and where these issues occur. Recently, it has been reported that poverty in Germany is on the rise. Although we do not always associate Western European countries with poverty, poverty has become a global issue, affecting all types of people.

Around one-fifth of German youth live in poverty. Poverty among young Germans is on the rise due to lack of proper education and vocational training. According to Simon Rapp, Chairman of the Federal Association for Catholic Youth Welfare (BAG-KJS), “this poverty occurs due to the absence of equal opportunities in the German education system, which often results in young people being excluded from society.”

In addition, “German youths have been having an increasingly hard time” finding a job, due to the lack of educative opportunities.”

According to a study from the Bremen Institute for Workplace Research and Career Support, around 220,000 young people between the ages of 15 and 24 live in households dependent on Hartz IV state welfare. Around 90 percent have reported that they have never received vocational training or had access to education. In Berlin alone, 20 percent of the youths are dependent on welfare and unemployment benefits.

To make everything clearer, a study from the Hans-Böckler Foundation estimated that 18.9 percent of young people live in poverty in Germany. Thanks to the study, German officials have calculated that more than 2.5 million children and young people are poor.

To make matters worse, poverty among German youths is expected to increase. Lack of proper education, vocational training and unemployment is expected to rise for Germans within the coming years. According to The Local, a study by German officials found that for young people aged 15 to 24, education played a key role in which youngsters would end up in poverty. Moreover, the study found that teenagers with leaving certificates from Hauptschule schools were “the lowest rung on the academically-tiered German school system, or those who drop out early.”

Education is the best protection against poverty. The question is, how can we help German youths access education?

 — Stephanie Olaya

Sources: The Local, WSWS
Photo: The Spiegel