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DIW study: Wage inequality is falling in Germany

2022-06-09T10:11:55.796Z


A new study by the DIW shows that the gap between normal and top earners is narrowing. But the researchers fear that inflation will hit low earners in particular.


Enlarge image

Protest against inequality in Berlin (picture from January 2017)

Photo: Sophia Kembowski/ dpa

According to a study, wage inequality has fallen significantly in Germany over the past decade.

According to a new study by the German Institute for Economic Research (DIW), the upper end of the wage scale earned four times as much as the lower segment every month in 2020.

According to this, the gap was much larger in 2011 – back then, the top earners earned eleven times as much.

"It's gratifying that wage inequality has fallen significantly again in the past ten years," said study author Markus Grabka.

This is also due to the statutory minimum wage.

This was introduced on January 1, 2015.

On October 1, it is to rise to twelve euros per hour.

"In earlier crises, such as the financial crisis and also during the corona crisis, the gap between rich and poor did not widen further because the federal government counteracted this with suitable measures," said Grabka.

"But what worries me is the currently high inflation." In all probability, this will mean that the population will have less real income in the coming years.

The inflation rate is currently 7.9 percent, the highest since the early 1970s.

The energy price flat rate decided by the federal government is to be welcomed as a relief measure.

However, since this is only granted to all actively employed persons, other households that are excluded from this measure should not lose sight of - such as pensioners or students.

"Therefore, other instruments of financial support should be found for these groups," said Grabka.

How the corona pandemic is affecting wages, income and their inequality has not yet been fully recorded.

The current household survey - on which the DIW study is based - was already halfway through by the time of the corona pandemic.

"Preliminary samples suggest that the pandemic has not yet increased inequality in household net income," it said.

beb/Reuters

Source: spiegel

All business articles on 2022-06-09

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