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Germany middle class “shrinking”

euromillions2Middle earners in Germany are in steep decline, having plunged by 6% in two decades, according to the German Institute for Economic Research.

The study found that the number of high earners increased by 10% during the period 1991 to 2013, taking home 33% of total income in 2013.

Although the number of top earners among the population only slightly increased, their total wages rose rapidly, particularly from the 1980s until the 2000s.

The middle class earned 67% of all income in 1991 but this fell to 57% by 2013.

During the period, the number of people on lower incomes also rose, particularly among those aged between 18 and 30.

Analysts believe that an increase in poorly paid jobs in the service sector and a decline in industrial sector work are the main factors behind the decline of middle class numbers in Germany.

A separate report in March showed that income equality has lessened over the last 15 years, placing Germany below the income equality standards of some other countries, such as Sweden, Denmark and the Czech Republic.

Despite enjoying the highest employment rates since reunification, critics say that the figures include part-time jobs as well as poorly paid work.

The trend in the Federal Republic has been compared to a similar decline of middle class earners in the USA, although the polarisation in Germany has not matched that in the US.

Top earners in the US now have the largest share of overall income, having gone up by 49% between 1990 and 2014. At the same time, the middle class share slid from 54% to 43%.

While in Germany people from migrant backgrounds were most likely to have fallen out of the middle earner bracket, in the USA the trend hit Latino migrants hardest of all.

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