How long do income differences last?

societyInequality doesn't have to mean injustice

"There are studies where people are asked what do you think is the distribution of income in your country? And if you ask people, the result is a kind of pyramid of income distribution. So a very broad base below, a lot of poor people People. And then there is less and less up and very few are at the top. "

The rich get richer and the poor get poorer. The gap between rich and poor is widening. Hardly any German citizen would question such statements. However, the perceived imbalance does not always coincide with reality. In any case, there is no pyramid in the distribution of income, as many Germans assume. Professor Andreas Peichl, Economist at the Munich Ifo Institute:

"Not a pyramid at all, but more of a top. Significantly fewer people at the bottom, more in the middle and also at the top end of the income distribution, significantly fewer people. But it is actually the case that many people think that it is much more unequal in Germany than it actually is. "

Different methods - different results

It's a tricky and thoroughly controversial thing about inequality. More complicated than often represented in public opinion. If one compares gross wages, the inequality is higher than in the case of net wages. In relation to the population as a whole, it falls, but stagnates if only those in employment are compared with one another. Researchers also discuss the point at which inequality becomes unjust. And what impact it has on society. However, one thing is certain for everyone:

"Between 1999 and 2005 you can see an extremely strong increase in economic inequality in Germany," says Olaf Groh Samberg, professor of sociology and inequality researcher at the University of Bremen. The reasons for the increased inequality are diverse. The wages of the well-qualified rose, at the same time the low-wage sector was expanded. The top tax rates have been lowered. In addition, there were economic inequalities between East and West Germany. And the increase in single and single parent households means that precarious living conditions can be buffered less by a high-earning partner than in the past. However, inequality has hardly risen in the last ten years, but it has hardly decreased either.

"In the last 12, 13 years, since 2005, it has remained reasonably stable."

Wealth inequality particularly high

In terms of net income inequality, Germany is just below the EU average. In contrast, there is almost no other country in the euro zone where wealth inequality is as high as it is here. Why this is the case, however, may surprise some. Professor Christian Bayer, economist at the University of Bonn:

"If you look at Europe, for example, it might be a bit surprising at first glance that the highest wealth inequality is in Sweden. Wealth inequality in Sweden is significantly higher than in Great Britain, which is considered a relatively unequal country within the EU. And we also did a study on this here in the house. "

The study comes to the conclusion that 40 percent of the differences in wealth inequality are related to the different basic social security benefits in the euro zone.

"If you look at southern Europe, Greece, Italy, Spain, then, roughly speaking, we have no basic social security at all. ... The need to build up wealth is of course in a country where very bad things can happen to me if I don't I have an income that is much higher than in a country where the worst hardships are prevented. ... Even a relatively poor worker in Greece will try to save, while in Germany the need is not so strong because in the worst case he is covered by the state And that, in turn, over time leads to a completely different distribution of wealth, because poorer families then inherit more. "

Income and assets that are far apart from each other generally contradict the natural sense of justice. But are inequalities bad for a society per se? When do they become a problem and what are the consequences?

"Economists would say we need a certain amount of inequality because that creates incentives for economic competition. If we had a uniform wage in all professions, there is little incentive to go into certain professions. And, where a lot is achieved , it also needs higher wages and higher incentives. "

Andreas Peichl from the Munich Ifo Institute differentiates: "Inequality is not always harmful, injustice is harmful. So the question is whether inequality is synonymous with injustice?"

When does inequality become unjust?

But when does the fact that not everyone get the same become unfair? For many, this is more of a philosophical question than one for economists. Christian Bayer:

"We have very different levels of inequality in the world, inequality in income, in wealth. But I find it difficult to say from a scientific perspective that a problem arises from there. Perhaps certain things get continuously worse when the inequality increases, other things may get better when inequality increases. But to say that's where it gets problematic, that's difficult. "

In the 1970s, the philosopher John Rawls tried to determine when economic inequality turned into injustice. Possibly, he said, inequality is unavoidable, but then it must literally "bring the best possible prospects to the least fortunate".

Olaf Groh Samberg: "Well, that is the famous Rawls criterion that even those who are worst off, as long as they are still benefiting, growing inequalities are not a problem. That is no longer the case today. That is the case with the bottom ten percent Real income even decreased. Then there is the argument that inequalities can be fair if they are performance-based. If we have a level of competition and this competition is fair, then we may have a higher level of inequality, but this is legitimate because everyone has the chance That would mean that with higher inequality we would also have to see higher mobility, we don't see that. That is, those who are above descend less often, those below ascend less often than was previously the case . "

Andreas Peichl and his colleagues tried to measure the injustice of inequality. To do this, they first determined three criteria for justice:

"One thing is that of equal opportunities. It is about the fact that someone who performs the same must also be rewarded accordingly, regardless of their origin. And there must be a poverty line. Where we say we don't want that someone is below that subsistence level. And just like that, at the high end of the distribution. Somewhere it's no longer justified for someone to earn very high incomes. Why should that be fair at one point?

The result may come as a surprise to many: According to the Ifo researchers, only 17.6 percent of total income inequality in Germany is based on injustice.

Lack of opportunity is the real problem

"All in all, the result is that we in Germany are in the upper middle range when it comes to fairness. There are countries in Europe that do better, these are mainly Scandinavian countries, but also the Netherlands. And there are others Countries that are similar to Germany, including Austria, but there are also countries that do worse, especially in Eastern Europe, also in Southern Europe, for example Italy, where a lot depends on where you were born, in the North or South and family relationships play a big role. "

The Ifo Institute researchers do not see the equity gap in Germany in the distribution of income, but rather in equal opportunities. School success depends more than in other countries on the socio-economic background and the educational level of the parents. There is a need for improvement here.

"In Germany we have a great injustice in the education system because the parents have a very strong influence on who goes to high school, who studies and graduates. We now have a right to early childhood care, but proper education, so teachers for I don't see children under three in Germany. And on top of that, in many cities daycare centers for under three cost a lot of money. We provide free higher education, but make sure that we only grant daycare access to people who can And they are ultimately high-earning academics. And that children from other backgrounds do not even come to the university. "

Perceptions of researchers and the general public differ

While the researchers at the Ifo Institute rate unfair inequality in Germany as moderate, the German population disagrees. The director of the socio-economic panel at the German Institute for Economic Research, Professor Stefan Liebig and his colleague Jule Adriaans examined the perception of justice at different income levels in a representative study. Top manager salaries were excluded.

"What we are observing is that the lower incomes are actually perceived by a very large majority of the population as unfair, as too low. Interestingly, this assessment is not so high among the upper incomes. That means two thirds of the respondents believe that income are quite fair in the upper income bracket. "

What is remarkable about the results is that almost all of the respondents in the study consider lower incomes to be unfairly low, but two thirds to three quarters of those surveyed consider their own income to be fair. So is it perhaps more of a "felt" injustice that the Germans are articulating here?

"So if three quarters of the population say this inequality is too high for me and an economist says, I did the math, but that's not that bad, who decides then? And I think that's a fundamentally democratic question, how much." We want inequality, what kind of society do we want to live in? "

If people perceive a society as unjust, according to Olaf Groh Samberg, this has fatal consequences for social cohesion:

"We have poverty that is solidifying, there is little mobility out of poverty, the life chances of those who are below have deteriorated. And we see how much the voter turnout in the lower classes has fallen, how unequal the political participation Participation has become because certain social groups are no longer properly represented by established parties that call themselves people's parties. And other parties can then find their way into such gaps. "

New social dividing lines?

But whether the political division that has been recorded in Germany in recent years has really socio-economic or more socio-cultural reasons is a matter of controversy. Do the social dividing lines run between rich and poor, or are they now more between those who affirm the social modernization processes with all their confusion and those who belong to the modern skeptics?

"This has long been discussed in comparative political science in such a way that social conflicts not only run along one axis, poor and rich, or above and below. Rather, there is a second very central axis in modern societies and some call it that, the one between cosmopolitans and communitarians, i.e. between those who are for a society that is as open as possible, for openness to external borders, and on the other hand a group of people for whom something like home, community, a sense of togetherness, a homogeneous identity is important And that's why they say we want secure external borders, no migration, we don't want gay marriage.

However, Olaf Groh Samberg points out that there is often a connection between economic position and cultural preference. The so-called "communitarians" who affirm the cultural homogeneity of society are more likely to be found in the lower to middle classes than in those with a high socio-economic status. With the result:

"We see how these two axes ultimately become a diagonal conflict axis between, on the one hand, very modern, liberal milieus. On the other hand, a pole that can be described as the losers of globalization, because they are among these losers both economically and culturally. "

The Leipzig sociologist Holger Lengfeld does not deny this connection. However, he comes to the conclusion that the cultural division in society should not be downplayed for this reason. His empirical findings indicated that the "communitarians" who are close to the right-wing populist parties cannot be persuaded to give up their populist tendencies with purely distribution-related offers - speaking: less inequality. But probably only through a more restrictive attitude in dealing with refugee immigration.