Germany’s wealth inequality, while marginally decreasing, remains a deeply entrenched societal challenge, according to a draft report for the upcoming national poverty and wealth report. The document, set for release by the federal government and reviewed by the Frankfurter Allgemeine Zeitung, reveals a persistent imbalance despite a slight moderation in the share of national assets held by the wealthiest 10% of the population.
In the early 2010s, the top 10% controlled a staggering 59% of Germany’s net wealth. This figure has since dipped to 54% by 2023, a reduction largely attributed to the upward mobility of the upper-middle class catching up with the wealthiest echelon. While the number of households burdened by negative net wealth – debts exceeding assets – has decreased from 9% to 6%, the overall distribution remains heavily skewed. The bottom 50% of the population continue to hold a paltry 3% of the nation’s total wealth, a figure that has remained stubbornly static despite increased asset holdings within that segment.
The average net wealth per household reached €325,000 in 2023, a significant increase of €130,000, or two-thirds more, compared to the early 2010s. While the Bundesbank’s data indicate a broad-based increase in asset holdings across various income brackets, the Gini coefficient, a standard measure of income inequality, only fell from 0.76 to 0.72 during the period, illustrating the persistence of the disparity.
Critically, the report highlights a disconnect between public perception and statistical reality regarding poverty and wealth. Public opinion vastly overestimates the number of individuals experiencing poverty and significantly exaggerates the prosperity of the wealthy. This discrepancy fuels social tensions and potentially impedes the effectiveness of policy interventions.
The draft report credits the current “traffic light” coalition’s social policies, notably the substantial increase in the minimum wage and the housing benefit reform, with positive impacts. Analysis of household income across various employment scenarios between 2021 and 2024 demonstrates that net incomes for minimum wage earners have risen somewhat faster than those of the unemployed – a narrative intended to showcase a degree of social progress. Nevertheless, the persistent wealth gap underscores the limitations of such targeted interventions and raises questions about the systemic inequalities underpinning Germany’s economic landscape. The ongoing challenge lies not just in mitigating the symptoms of wealth inequality, but in addressing its root causes and fostering a more equitable distribution of resources within German society.