Germany

From EconWiki
Jump to: navigation, search

Contents

Background

As Europe's largest economy and second most populous nation (after Russia), Germany is a key member of the continent's economic, political, and defense organizations. European power struggles immersed Germany in two devastating World Wars in the first half of the 20th century and left the country occupied by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945.ith(With) the advent of the Cold War, two German states were formed in 1949: the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR). The democratic FRG embedded itself in key Western economic and security organizations, the EC, which became the EU, and NATO, while the Communist GDR was on the front line of the Soviet-led Warsaw Pact. The decline of the USSR and the end of the Cold War allowed for German unification in 1990. Since then, Germany has expended considerable funds to bring Eastern productivity and wages up to Western standards. In January 1999, Germany and 10 other EU countries introduced a common European exchange currency, the euro. In January 2011, Germany assumed a nonpermanent(non-permanent) seat on the UN Security Council for the 2011-12 term.[1]

Poverty and Inequality

In recent years social inequality and poverty has drastically increased throughout Germany in comparison to other countries around the world. A study conducted by OECD found that since the year 2000, income inequality and poverty has grown faster in Germany compared to any other OECD country.

In Germany, the poverty level for a single person is found to be a yearly income of 9,100 euro ($US 11,400). From this measurement, it’s found that 11% of Germany’s population live in poverty. The country with the highest social inequality and poverty is actually the United States (17.1%). The poverty ratio in Germany was roughly 25 % less than the OECD average in the beginning of the 1990s. It can also be noted that Germany is among the top countries with the highest growth rate of child poverty. In fact, 16% of children in Germany live in poor family households. Not only that, but the wealth distribution in Germany is very unequal. The richest 10% of people in Germany make up roughly half of the countries total assets.[2]

According to the Joint Welfare Association, one out of seven children under the age of 15 is reliant on welfare payments. For eastern Germany, this statistic rises to one out of every 4 kids under the age of 15. In Berlin, nearly 1/3 of all children receive welfare. During 2005 and 2010, Germany did not have a single city in the Ruhr region that did not experience any social welfare decrease. Larger families and single-parent families are struggling to cope with poverty and decreased welfare. Nearly half of all children living with one parent are dependent on welfare. While the majority of the population is experiencing higher levels of poverty, the upper class is also staggering. According to the “Global Wealth Report”, Germany is second in the world for wealth rankings, falling short to the United States. [3]

Contributing Factors to Inequality

From 2000 to 2006, Germany experienced a rise in income inequality. At the same time, unemployment rose and there was evidence for a widening distribution of labour(labor) market returns, as well as that of other market incomes. Other factors that possibly contributed to the rise in income inequality were changes in the tax system, changes in the household structure (in particular the rising share of single parent households), and changes in other socio-economic(socioeconomic) characteristics (e.g. age or education).[4]

References

  1. https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html
  2. Henning, D. (2008). World Socialist Web Site. Increasing Social Inequality and Poverty in Germany. Retrieved April 13, 2012 from http://www.wsws.org/articles/2008/oct2008/oecd-o28.shtml
  3. http://www.wsws.org/articles/2012/mar2012/germ-m08.shtml
  4. Biewen, Martin. "Understanding Rising Income Inequality in Germany." By Martin Biewen, Andos Juhasz. Web. 17 Apr. 2012. <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1648347>.

(edit) ()-denotes editing

Personal tools
Namespaces
Variants
Actions
Navigation
Toolbox