German Poverty Risk
The study has shown that around 10 million Germans may fall into poverty by 2020 because of the country’s slow economic growth. This prediction is based on statistics made available by the weekly Bild Am Sonntag newspaper. The inequality between rich and poor has recently become more obvious and Germany is also experiencing a rise in the cost of living.
The Financial Times reports on this problem.
Just eight years ago, 62 per cent of Germans were in the middle-class bracket, according to a separate study by Berlin-based DIW, one of Germany’s top economic institutes. In recent years, the German growth model has relied almost exclusively on productivity gains, the authors of the McKinsey report write. Given the new challenges, this concept is now reaching its limits.
Slow economic growth has obviously had an impact on the job market. As labour market statistics show, job creation flattened out by April. According to The New York Times the probability that Germany will be able to stimulate it’s economy is rather low.
American and other foreign officials wish Germany would stimulate its economy, the biggest in Western Europe, so that it would import more and thereby give its slow economy and the stagnating world economy a boost and help reduce the huge American trade deficit. But ”rigidities” in the German economy like the shopping-hour restrictions and the reluctance of Germans to change things are a major reason why that wish may only slowly if ever come true.
Photo: © Greg M
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