New report paints picture of rising inequality in Germany

The regional differences in Germany are great: the income per capita of private households in Gelsenberg (Nordhrein-Westfalen) is half that as much as that of a private household in Starnberg (Munich).

With falling unemployment, increased exports and comparatively stable growth rates. Germany’s statistics paint a positive picture. But many Germans have been left behind, EURACTIV Germany reports.

The gap between rich and poor regions keeps widening. This is the main message of the new Friedrich-Ebert-Stiftung study entitled ‘Ungleiches Deutschland’ (unequal Germany).  While several cities and districts are booming, other regions are being left behind.

This applies primarily to eastern Germany, but also to metropolitan regions in the west, which have been facing major problems because of the structural change in industry.

In Gelsenkirchen, in Nordrhein-Westphalen, for example, the income per capita for private households is €16,203, half of that in Germany’s wealthiest city: Starnberg in Munich.

The unemployment rate in Gelsenkirchen is 10.7%, well above the German average. The city is also affected by debt, weak growth and emigration. This is a vicious circle that is being accelerated because balancing between the federal government and the states no longer works, according to the Friedrich-Ebert Stiftung report.

Higher risk of poverty even in affluent cities

But the report warns that the increasing risk of poverty is also affecting successful cities.

Although unemployment has seen a steady decline since 2005 – from 3.4% ten years ago to 2.3% today, this has not stopped the gap between rich and poor from widening further. This is because costs of living and rents have been sharply increasing. Employment is also becoming precarious with atypical forms of employment and low salaries.

The German government set up an ‘Equal Living Conditions’ Commission last summer, The Commission is set to present a report with concrete proposals in July

Authors of the Friedrich-Ebert Stiftung study are now calling for one of the Commission’s proposals to be the restructure of state investment aids to take account of regions and spatial differences.

The report also proposes the creation of a joint debt relief fund applicable to the country and federal states, in which old debts of the most burdened municipalities could be bundled.

But the study also highlights that the debt relief should be subject to conditions to improve the situation in the long term, and the poorest should also be relieved of social security contributions, according to the study.

“Additional measures to support single parents, combat child poverty and address the issue of early school leavers should also exist,” Phillip Fink, one of the authors of the study, told EURACTIV.

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The German crowdfunding project "Mein Grundeinkommen” (my basic income) has already funded 300 people who have benefitted from a monthly income of €1,000 for a year and 13 Departments in France are eager to introduce such a financial subsidy. EURACTIV Germany reports.

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JA Europe

The “NEETs in Entrepreneurship” project is funded by Iceland, Liechtenstein and Norway through the EEA and Norway Grants’ Fund for Youth Employment. It is implemented by five Junior Achievement member organisations (JA Europe, JA Bulgaria, JA Italy, JA Romania and JA Spain), in addition to JA Norway who acts as an expertise partner.

By the end of the project in 2021, 1,600 young people not in education, employment or training (NEETs) in the four beneficiary countries (Bulgaria, Italy, Romania and Spain) will have received training and support to acquire the necessary skills to find a job or start their own business. In addition, the project aims to prevent another 1,000 students from becoming NEETs by giving them training and counseling.


Selection

Selection

1,600 NEETs + 1,000 VET students will develop entrepreneurial skills


Prevention

Prevention

A prevention programme on school dropout will enable better cooperation between schools and students, ensuring the integration of good practices into the educational systems


Blended Learning

Blended Learning

The programme delivered in the four beneficiary countries uses both online and live sessions


Business Development

Business Development

Entrepreneurial practice will be provided to 400 NEETs through a business incubator; 40 of them will receive financing to set up their own businesses


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