GERMANY:GERMANY IS increasingly a society of haves and have-nots, according to a new government report, with more than a quarter of the population either poor or dependent on social welfare, writes Derek Scally.
The federal labour ministry's Poverty Report, the first commissioned since radical welfare and labour reforms came into effect, casts doubt on whether Germany's recent economic tide is lifting all boats.
"I find it particularly concerning that the number of those who are employed and still live at the poverty level has risen," said Olaf Scholz, the Social Democrat (SPD) federal labour minister.
"It shows that our wages are too low in Germany and that we need a minimum wage."
That prompted an angry reaction from the SPD's Christian Democrat (CDU) grand coalition partner. Since entering an uneasy alliance in 2005, the CDU has successfully blocked SPD plans for an across-the-board minimum wage, claiming it would destroy more jobs than it would create.
Though still one of Europe's wealthiest states, some 13 per cent of Germany's 82 million citizens are classed as poor, the report says. Using the EU formula for classifying "poor" - surviving on less than 60 per cent of the average income - a single person in Germany is poor if they live on less than €781 net a month.
Another 13 per cent only stays above the poverty line thanks to welfare. And 26 per cent of the population is at "risk of poverty", with no significant savings, up from 19 per cent in 2000.
"What's happening is that existing poverty is deepening," said Ulrich Schneider, director of the DPWV charity. He blames the developments on Schröder-era economic reforms that cut the level and duration of dole payments.
The upper class, earning more than 150 per cent of the average income, has expanded slightly in the past eight years, from 19 to 20 per cent. The greatest squeeze is on the middle class, living on 70 to 150 per cent of the average income, dropping from 62 per cent of the population to just 54 per cent.
"Salaries in the middle class are stagnating and the lower class has decoupled itself entirely," said Mr Schneider.