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Germany

German middle class shrinks by the year, study says

A fresh German study has found that the country's once robust middle class has been shrinking rapidly for years. It's also confirmed that low-income earners hardly ever move up the social ladder.

Once the backbone of society, the German middle class dwindled over the past 15 years, a new joint study by the Bertelsmann Foundation and the German Institute for Economic Research (DIW) revealed on Thursday.

Based on a poll of 20,000 adults, the study found that right now middle-income earners accounted for 58 percent of the overall German population, down from 65 percent back in 1997. In absolute numbers, the middle class thus decreased by 5.5 million over the period under revision to total 47 million people.

At the same time, four more million people were added to the army of low-income earners, the survey said, while adding that once relegated, a renewed promotion to the higher income league was the exception rather than the rule.

Winners and losers

"Fewer and fewer low-income earners are able to make it into the middle class, and even decent education and qualifications are no longer a guarantee for secured well-being," the study maintained.

It said that while middle class ranks were thinning out, the number of high earners had been increasing steadily despite the protracted eurozone debt crisis, with half a million Germans added to those for whom financial worries were an alien notion.

The authors of the study said the shrinking of the middle class had several reasons. It particularly cited a greater of number of single parents in Germany, who generally have a tougher time making ends meet. It also mentioned a 1990 reform of the top income tax rate which had hurt middle-income earners while seeing top earners profit most.

The Bertelsmann study describes the middle class as those earning between 70 and 150 percent of Germany's mean salary,

The study defined a middles class household as one earning between 70 and 150 percent of Germany's mean income. In the case of a family of four with two adults and two children, that would equate to between 2,400 and 5,100 euros ($3,135 and 6,662) each month.

hg/msh (dapd, epd, Reuters)