The publication "Russkaya Germaniya" asks why, in the wealthy social state of Germany, many of its residents end up in dire straits in old age.
A number of the most typical reasons leading to such an outcome were identified by scientists from the Institute of Sociology at the University of Duisburg-Essen. Its director, Professor Dr. Ute Klammer, and her colleague, Dr. Antonio Brettschneider, conducted a study they called "Life Paths to Poverty in Old Age" ("Lebenswege in die Altersarmut"). But before moving on to an overview of its findings, a brief preamble.
As Dr. Brettschneider explains, "After the reunification of Germany, there was an economic crisis in the country that increased the number of unemployed and the gap between rich and poor. Those who were unemployed then now receive small pensions and need support. According to the norms adopted in Germany, an elderly person needs to receive at least 800 euros per month. If the pension is below this threshold, the state pays the amount needed to reach the subsistence level.
It is believed that about 400 euros go to housing costs, and another approximately 400 euros the pensioner spends on other expenses, including food. According to statistics, 535,000 people, or 3% of all pensioners, receive such a supplement in the country. In reality, there are twice as many people in the country who are entitled to this benefit. But many do not apply for it—some out of pride, others simply do not know about this possibility.
Even under Chancellor Schröder, the state began to reduce pension payments,” continues Dr. Brettschneider. “This was done to stimulate economic growth and increase the country's competitiveness. In addition, many who came to Germany in the 1990s need support—for example, emigrants and resettlers from the former USSR and guest workers from Turkey. Their work experience does not allow them to receive a sufficiently high pension in Germany.
As for native Germans, it should be noted that since the mid-1990s, there have been many low-paid jobs in the country—that is, people worked but received low wages, which affected the amount of contributions to the pension fund. Along with that, there was also a large number of self-employed (individual labor activity), but those who engaged in it did not think about their own future in terms of pension provision."
Professor Ute Klammer adds to her colleague: "There are other phenomena—for example, changes in family structure. In the past, women usually had a substantial widow's pension. But if more and more marriages break up or people do not marry at all, preferring to live without registration, then such a prospect cannot be counted on. Another of the biggest risk factors is illness. Third: there are people who could provide themselves with a sufficient material base in old age, but perhaps they did not know about the importance of regular insurance contributions. I also believe that it is very important to explain to women the consequences of long breaks in work or reduced working hours.
Education plays a huge role. In our society, it pays off to a large extent. If you successfully complete secondary school and university, your income will increase significantly. In the times of our grandparents, one could make a career through on-the-job training. Today, education is valued."
During the study, scientists surveyed a large number of people of retirement age. The survey results revealed typical reasons why these people ended up below the poverty line in old age.
The largest group was called by researchers "Family-Oriented Women" ("Familienorientierte Frauen"). According to Prof. Klammer, "These include women who devoted themselves to working for the family. In the traditional system, these women are well protected—but only as long as the marriage lasts and the husband has a job. But problems arise when the husband fails as the family breadwinner—for example, when he receives a low salary or becomes unemployed. Then situations arise where women are forced to work, but most often it turns out that they are not in demand on the labor market.
Divorce creates a big problem. Although the wife receives half of the ex-husband's pension rights upon divorce, most often this amount is not enough even for a modest living. And a woman who has not worked for a long time has nothing to offer when entering the labor market. As a result, the years after divorce and before retirement are lost, leading to poverty in old age. And this is a common picture. Among single women in old age, the worst fate is for those who were successful housewives and mothers all their lives, but in the end were left alone with their problems."
The second large group of impoverished elderly people is "New Self-Employed" (Neue Selbstständige). "Overall, in recent years, self-employment has increased," says Prof. Klammer. "This was even stimulated by many measures in the labor market. People were motivated to become self-employed if they did not find paid employment. But earnings in this area are very low. They are enough to live on—often quite meagerly—but nothing is left for creating a 'safety net' for old age.
Self-employed people have no employer—they are their own employers, but this means they must save for their own pension themselves. And as practice shows, many self-employed people do not insure themselves in our pension system. In my opinion, this is one of the biggest gaps in our system," says Ute Klammer.
The third group is immigrants. "Many of those who arrived in Germany at the end of their lives were unable to earn many pension points," says Prof. Klammer. "Moreover, many migrants come not from the EU, but from countries with which Germany has no social security agreement. Our pension system is largely based on equivalence between contributions and benefits—those who pay more win."
Thus, you can hardly achieve a decent pension level if you arrived in Germany at the age of over forty. Moreover, many migrants find it difficult to find good work in the new country. That is why we have a large number of migrants, especially of Turkish origin, who end up in this group of poor people in old age.
And finally, the fourth group, named by the researchers as the "discontinuous complex" ("Komplex Diskontinuierliche"). "This group is the smallest and very heterogeneous," says Prof. Klarmer. "We grouped them together to show that sometimes various factors combine. Illness, divorce, debt, accidents, or unhealthy addictions (alcoholism, drug addiction, etc.) can push people to the margins of life. Some of our respondents were people who had a difficult childhood and started their working life with certain burdens. Those who had such a difficult start generally have few chances in the labor market."
Due to subjective reasons, many of those in Germany who are now over forty are unlikely to avoid poverty in old age. But those who are now about 25-30 years old may still have time to prepare for old age.