Those living below the poverty line in Germany have a monthly income below 942 euros
"Economic stability and sustained economic growth have played a role in achieving the highest employment rates and the lowest unemployment since German reunification," says the document approved by the German government in April. Incomes have also risen significantly over the past ten years, according to the report.
Nevertheless, as Minister of Labor and Social Affairs Andrea Nahles emphasized, not everyone in Germany has felt this economic upswing. In 2015, the 40% of the working population with the lowest incomes earned less in real terms than in the mid-1990s. According to the Federal Statistical Office, the poverty rate in the country in 2015 was 16.7%, or just over 13 million people. This means that virtually every sixth resident of Germany lives below the poverty line.
The Federal Statistical Office classifies as poor those with very low incomes, as well as those whose families "are subject to severe material deprivation or have low employment." This refers to those who earn less than 60% of the average income in Germany, explains the joint report on poverty levels in Germany, published by a number of German non-governmental organizations, including the German Parity Welfare Association (Der Deutsche Paritätische Wohlfahrtsverband – Gesamtverband e. V.) and ProAsyl.
As Deutsche Welle notes, those living below the poverty line in Germany have a monthly income below 942 euros for unmarried individuals and 1,978 euros for families with two children under 14. This is the "total net household income," which includes housing allowance, child benefit and child supplement, and other financial assistance, the report by non-governmental organizations specifies.
The most vulnerable categories include the unemployed, single parents and their children, the elderly, as well as people with disabilities and those suffering from chronic diseases. In the future, refugees will also fall into the risk group, notes Ulrich Schneider, head of the German Parity Welfare Association: "They too will be included in the statistics after they leave the temporary accommodation center and set up their own households after receiving asylum." Above all, he adds, they will need to find housing, which is not always possible in large cities.
Such different poverty
The number of homeless people in Germany is estimated at 335,000. By 2018, this number could rise to half a million, warned Verena Rosenke, head of the Federal Association for the Homeless, in March. The lower the income, the higher the share of spending on housing, and the trend is that the poor are becoming even poorer, she explained and added: "Therefore, people with low incomes often fall into a debt trap, which may ultimately threaten the loss of housing."
Some critics, however, note that in rural areas, where rental rates are lower than in large cities, it is much easier to live on 942 euros per month. Therefore, the approach to setting the income that defines the poverty line seems too uniform to them.
According to Michael Hüther, head of the German Economic Institute (IW) in Cologne, it would be reasonable to take into account regional differences in purchasing power and individual needs when calculating it. For example, in Munich, the most expensive city in Germany, the poverty threshold is not 942 but 1,128 euros, while in the Bavarian town of Tirschenreuth, those earning less than 823 euros per month fall into the risk group, the expert said.
The lack of differentiation is also pointed out by Gerd Landsberg, head of the German Association of Cities and Municipalities. According to him, out of 2.8 million students in Germany, hundreds of thousands are forced to live on an amount that is less than 60% of the average monthly income. These are people who cannot be classified as disadvantaged, Landsberg emphasized: they, on the contrary, consider themselves the future driving force of the German economy.
How to calculate the poverty line
However, Ulrich Schneider of the German Parity Welfare Association disagrees that regional differences should be taken into account when calculating the poverty line. He is convinced that this could distort the result: "If you take individual districts of Berlin, you can hardly detect poverty there." Therefore, a general average indicator for all of Germany is necessary, Schneider believes.
He considers the proposal to take into account differences in purchasing power in different regions "quite commendable" but ill-conceived. After all, to do this, he explains, it is necessary to know the composition of the consumer basket in all regions, and such data are not available. Moreover, Schneider emphasized, experience shows that people with low incomes adapt to a certain standard of living. For example, they only shop at discount stores, where prices are the same throughout Germany.
Non-governmental organizations are convinced that to combat poverty in Germany, changes in the labor market and in the social policy of the authorities are necessary. In particular, they propose increasing funding for kindergartens and schools, allocating more funds for the construction of social housing, and reforming pension insurance and the system of benefits for the elderly to prevent poverty in old age.