Poverty and purchasing power: Where most poor Germans live

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In the west is well earned, in the east, the salaries are mau. This is true, 30 years after the fall of the wall, as certainty - exceptions confirm the rule.

But is that true? And what does it specifically mean for the everyday lives of people? After all, the former GDR and the old FRG also differ in terms of consumer prices, the cost of living and rents.

How does that affect? Are salary differences compensated, at least alleviated? Or, conversely, aggravated?

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In a new study, which is available to SPIEGEL, the Institute of German Business (IW) in Cologne answers. The short form: The purchasing power of the middle income is not so far apart in both parts of the country, as some might think. Namely, only 104 euros per month: While the purchasing power in the East is 1538 euros, it is 1642 euros in the West. The concept of purchasing power takes into account how much you can actually afford for the earned euro.

In the IW study, this scale is applied regionally. (And not, as usual, nationally: a value for the whole republic.) After all, it's all about the differences between the regions. In fact, the differences are larger with 121 euros between urban and rural dwellers than between East and West citizens.

In the city you are poor with more money

The IW comes to these figures by comparing the price level and the wage level for relatively small regions. Using an example, the IW researchers explain why this is important. "In Munich, the price level is 23 percent above the national average," they write. This results in a higher threshold for Munichers, from which it is socio-scientifically described that an employee is at risk of poverty. If one assumes the nationwide scale, Munich are poor with an income of less than 969 euros per month (relatively low income). Including the regional price level, they are up to an income of 1201 euros (relatively low purchasing power).

If one counts now how many people fall under this threshold, one knows, how many people in their region are poor, thus - in the example of Munich to stay - less than 1201 euro to earn.

The usual poverty rate usually crops up in the political discussion: It indicates how many people earn less than 60 percent of the nationwide median income - they are considered poor. That's ten percent in Munich (who earn less than 969 euros). The poverty rate according to purchasing power (with the Munich threshold of 1201 euros) is significantly higher: 18.3 percent.

The map shows that there is sometimes a different distribution than you are used to. Munich is at a comparable level as several regions in Mecklenburg-Vorpommern. This means that there is a similar proportion of people who often can not afford the bare minimum at their place of residence.

Purchasing power and poverty in German regions

Touch the card for details.

Note: When you tap the map, you see, among other things, which statistic region ("adjustment layer") is assigned to the particular district or city. Hamburg and Berlin are each divided into several such regions, but are shown summarized on the map. Deviating from this, the highest poverty rate is based on purchasing power in the districts of Berlin Neukölln (32.1%), Hamburg Mitte (30.7%), Berlin Mitte (Tiergarten, Wedding) / Friedrichshain-Kreuzberg / Charlottenburg-Wilmersdorf / Spandau (29.7 %) and Berlin Spandau (27.4%). The lowest purchasing power lies in Berlin Neukölln (1187 euros), as well as the highest common poverty rate (30.6%).

Perhaps surprising for some: The regions with the highest poverty rate according to purchasing power are all located in the west:

• Bremerhaven,
• Cologne,
• Nuremberg,
• Gelsenkirchen,
• Bonn,
• Frankfurt am Main,
• the region Offenbach / Darmstadt / Wiesbaden,
• Wuppertal,
• Dortmund,
• the region Herne / Bochum.

Unsurprisingly, none of the regions with a particularly low poverty rate are in the East.

In the following table you can find out the values ​​for your region - and several poverty indicators at once. Just type in the name of your county or county in the search box, then see which region was included in the study and you can see the poverty rate by purchasing power, the conventional poverty rate by income, purchasing power and price level. The price level of the entire Federal Republic is set here to 100, 123 means that a regional price level is 23 percent higher, 94 means that it is six percent lower.

Purchasing power and poverty in German regions

Source: Forschungsdatenzentrum (Microdata Microcensus 2016), BBSR, Institute of German Business
Prices: D = 100; KS = district-free city, SK = city district, LK = district

The cutting of the regions follows here the so-called adaptation layers. This concept has been established by the Federal Institute for Building, Urban and Spatial Research (BBSR) in order to find statistically meaningful differences in price levels. The adjustment layers vary in population between 100,000 and 500,000; large cities may be single districts, while in rural areas several districts may be considered together.

How meaningful are these data - after all, a study commissioned by the employer-friendly IW on behalf of the industry-friendly initiative New Social Market Economy (INSM)? The cutting of the regions, however complicated it may seem, is considered a statistically quite meaningful concept. It could be more problematic which goods were used in the calculation of price levels: For a price comparison that is relevant for low-income households, above all, goods that belong to the minimum standard of living would have to be used. Here, however, worked with nationwide average prices. This could reduce the poverty effect in the data here and there.

On the other hand, housing costs are a major part of the expenditure, especially the rent. And that could have been exacerbating in the more than two years that have passed since the data was collected.

However, the study authors themselves assume that West and East could have come closer since then. After all, wages continued to rise, much more than prices.