Germany's middle class has changed little after the 2009 economic crisis

Friday, January 28, 2011

An article from Welt just a few hours ago cites numbers from a new study showing that Germany's middle class is stable and has gone through the 2009 economic crisis more or less unchanged. The society itself is aging and there are a lot of people nearing retirement age that live alone, but on the other hand they tend to have a good amount of money to burn and overall the numbers in the report look quite positive. The study was done by GfK.

The most pertinent info from the article summarized:

A new GfK study has shown some surprising findings: Germany has a stable middle class, many senior households, as well as a large number of singles.

The typical single shown in the study is one that has a rather high income, around middle age, without children, and single. Perhaps lonely but no financial problems. This is not such a bad phenomenon compared to the fear of a shrinking middle class found in many other countries. According to the newest statistics from GfK, 60.1% of those in Germany have a monthly income of more than 2000€, or $2740 per month ($33000 yearly). This is actually after tax, as income here is defined as the sum of all monthly payments (salary, pensions, child benefits...) minus taxes and social contributions.

Households with less than 1100€ per month ($1500 or $18100 per year) are considered to be low income, and these made up 14% of the country last year.

The three classes after this are defined as middle-class, and range from 1100€ to 2600€ ($3570 or $42850 per year), and these classes made up 44% of the country.

The rest make up the higher income class, and comprise 45.6% of the country. 3.1% make more than 7500€ a month ($10300 or $123 600 per year).

This new data comes out at a particularly pertinent time, as there is much worry in the country that it will end up with a shrinking middle class as well. But these numbers are little different from those in 2008, meaning that the economic crisis in 2009 has not shrunk the middle class. The change between 2008 and 2010 was as follows:

(2008 -- 2010)

  • Below 1100€ ($18,000): 14.1% -- 14%
  • From 1100 to 1500€ ($18,000 to $24,700): 12.2% -- 11.9%
  • From 1500 to 2000€ ($24,700 to $33,000): 13.4% -- 14.0%
  • From 2000 to 2600€ ($33,000 to $43,000): 14.8% -- 14.5%
  • From 2600 to 4000€ ($43,000 to $66,000): 25.1% -- 23.9%
  • From 4000 to 7500€ ($66,000 to $123,600): 17.8% -- 18.6%
  • 7500€ euros and above: 2.6% -- 3.1%
A chart showing this in German is here if you like.

So in short: the lowest low income levels are almost the same or ever so slightly smaller, slightly lower middle has grown a bit, middle middle is a tiny bit smaller, upper middle is somewhat smaller, upper is slightly larger, and upper upper is also a bit larger - although this highest income class has grown more than it seems due to starting out as the smallest group.

If there is one thing to be concerned about it's regional disparity: In Berlin one in four households (24.8%) is classified as low income, in Hamburg it's one in five (19.9%), whereas in Munich the number is down at 6%. Munich also has a high number of people in the highest class (7500+ euros per month) at 5.8%.

The numbers also show aging in German society: 40% of German households have just one person, 31% have more than one person but no children, and only 29% have children. This trend is expected to intensify further. The city with the highest number of singles was Berlin for a long time and it still has a 54.3% single population, but Regensburg has now edged it out with 55.8%.

The final interesting number is the ratio of foreigners: Offenbach has the largest number with 22.32%, compared with the national average of 8.2%. Berlin, oft cited as an example of failed integration, is actually down at 37% place with 12.7% of the population from abroad.

While reading the largely negative comments below one is reminded that positive numbers like these don't always exactly correspond with a positive mood in the country. Well, and that comments below articles are very often negative. Germany and other European nations have a lot of EU-wide concerns at the moment which naturally dampen the mood somewhat while South America seems to be feeling pretty good about itself overall. This article in Portuguese from a few days back references an Ipsos study showing that Brazilians feel the most positive about their country's economy in the next few months (78%), while France is dead last at 4%. Germany is most optimistic in Europe but still is at 27%, with even African nations as a whole feeling more positive at 32%, and Saudi Arabia at 47%.

One small piece of related news: the president of Portugal will now go without a salary. His salary in Germany would be classified as the second highest level at 6500€.

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