Where is the limit?
Am I still middle class or already poor?
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When does one belong to the middle class, when is one at risk of poverty? About the distribution of income in Germany – and how it is calculated nicely.
Just a few days ago, the Federal Statistical Office published a press release from which it emerged that in 2019 around two million people in Germany could not adequately heat their homes – because there was a lack of money. In the same year, more than every fifth worker in Germany was at risk of poverty. That corresponds to a number of approximately 3.1 million adults. But when is one considered "at risk of poverty" in Germany – and why is the arithmetical middle class so large?
"With the increase in the minimum wage, the economic and social participation of employees will be promoted," said the federal government. Since January 1 of this year, the statutory minimum wage has been 9.50 euros per hour – gross. By July 2022, it is to be increased to 10.45 euros. As things stand today, an employee who is paid according to the minimum wage and who works 40 hours a week earns 1,520 euros gross per month. If this person is single, childless and not a member of the church, the bottom line is about 1,152 euros net.
In Germany, poverty is calculated as a percentage of the median income. This is the income at which there is an equal number of people with a higher and a lower income, according to the definition according to the IAB forum. Translated, this means: Anyone who does not have more than 60 percent of the median income is at risk of poverty. Those who only have a maximum of 50 percent are officially poor. In 2019, the threshold for 60 percent was 1,074 euros for a single person. If you have less than 900 euros a month available, you are poor, writes the "Stern" and refers to information from the Federal Agency for Political Education.
So whoever receives the minimum wage is only just above the arithmetical poverty line – the difference is not even 100 euros. As a single person, around 1,100 euros per month is little, middle class or not. Especially if you live in a big city like Hamburg, Berlin or Munich. The rule of thumb of "a third of the net wage for rent, two thirds for living" is far from reality for many. Because just because mathematically you belong to the middle class, i.e. earn between 60 and 200 percent of the median income, you are far from off the hook. Our colleagues from "Stern" write aptly: "You can quickly see that poverty starts earlier."
The credit portal "Vexcash" compared the cost of living of people from ten different German cities, according to the "Stern". An average single spends 1,600 euros a month on accommodation, food, transport, etc. That would not be feasible with today's minimum wage alone. So why is that not enough? And why do you still seem to belong to the middle class – although you have to save where you can? The "middle class" phenomenon distorts boundaries and living standards and makes reality look beautiful for us.
Media used: destatis.de, stern.de, bundesregierung.de, iab-forum.de