THE BLOG
28/11/2013 06:16 GMT | Updated 27/01/2014 05:59 GMT

The German Paradox: Highest Employment in Europe and Increasing Poverty

The number of people at risk of poverty grows in Germany, although the number of employed has never before been so high, according to the results published this week by the Federal Statistical Office (Destatis).

The study, which takes a snapshot of German society from numerous surveys, shows that in 2012 the country had 41.5 million people employed, the highest in its history. However, the total working volume was at 1991 levels.

What does it mean?

As explained in the report, produced in collaboration with the Federal Center for Political Education and the Center for Social Research in Berlin, this is because in the last twenty years the average hours worked per person have dropped continuously. This is due to the fact that since 1991 indeed, while a higher percentage of the population works, there has been a significant increase in volunteering and/or part time work as well. Thus, the number of people without full-time contracts or temporary jobs grew to almost a quarter of the German population (22 %), especially affecting women (33%), those aged 15 to 24 years (33 %) and those with no qualifications (37%). The above seems to suggest a route to a number of probably imbalances, like precursors countries like Italy and France are experiencing today, causing higher precarity in society and social pressure on the welfare system.

At the same time, the percentage of German population at risk of falling into poverty has increased in recent years in the country and grew 15.2 % in 2007 to 16.1 % in 2011, according to the report, which considered "poor " those who perceived less than 980 euros per month in 2011. That percentage grew especially in population groups between 55 and 64, in which the percentage went from 17.7 % in 2007 to 20.5 % in 2011. The increase was much less significant among the people between 18 and 24 years: 20.2% in 2007 to 20.7 % in 2011. These are signs of a "trans-generational deficit" and divide that may cause new financial troubles for the economy with inevitable discontent.

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Source

According to the study, the percentage of population suffering "prolonged poverty " increased significantly: 40 percent of people in 2011 were considered at risk of poverty and had suffered deficiencies in income during the previous five years. In addition, more and more people belonging to the group of those with "less income" judge their health status as "bad" or "worse" than in previous years. If perception is equally important than reality, this could lead to a fall in consumers' confidence and apathy towards investments or sophisticated consumption (consumption of high-end products).

Poverty, according to the report, also influences the life expectancy of the population: life expectancy eleven years lower for men born in low-income areas compared to high income, whereas in women the difference is eight years.

Thinking ahead

The current German economy, its current excessive account surplus and the deflationary wave this is causing across Europe cannot be scapegoated that easily. It would not be healthy to do so, because the European Union is so minaciously entangled, that a German imbalance would generate greater inefficiencies elsewhere. The last thing we would want to create today is to distance those investors who have always believed in the strength of the German economy. Let us not repeat the mistake done with Greece and Cyprus, who became passive and unfortunate spectators of a disruptive "finger pointing strategy" that led nowhere.

What we need is a strong integrated union, a political one, which could reinforce policy decisions and learn from respective failures, without "blame" games of this sort.

The current situation in Germany invites everyone to play an important role and to discontinue this dependency from a solitaire game of "Deutschland ueber alles".

Germany is not the center of Europe and the soonest we understand it, the soonest Germany will be able to fix its own woes and get relieved from this burdensome role.

Only by shifting our perception from a patchwork of member states, to an integrated system "United in diversity", that we will give Europe, life of its own.