Expensive energy: is the middle class in danger of slipping away?

Higher prices, rising energy costs: How much does this affect the middle class? According to economic researchers, the middle of society is still doing quite well. But it gets tight directly below.

Paddling on the Neckar instead of splashing around in Egypt: Many people feel like Sabrina Scholz from Ludwigsburg these days. The single mother worries about the rising costs. She and her children are doing well, they are not at risk of poverty. And yet Scholz would rather save than afford a trip – although she hasn’t really been on vacation for years, as she says. The nurse has few reserves and she doesn’t yet know how high the electricity bill and utility bill will be this time. Maybe the rent will go up too. In the supermarket, she pays more attention to special offers.

Frieder Kummer

The “middle” on everyone’s lips

One example of many, of people who actually made it into the “middle” – and yet are afraid again. For weeks, politics has been conspicuously often about the “broad middle” or the “hard-working middle of society”, as Finance Minister Christian Lindner called them. It’s about the section of the population that “keeps the whole business running” (“Augsburger Allgemeine”), or about the “stable pillars” who, according to the CDU Economic Council, “work hard, pay their taxes and rarely enjoy relief “. When the first relief packages were passed, the debate revolved mainly around the middle class. Because it is threatened: by inflation, rising energy prices and more. But does the “centre” really need more support? Will she be forgotten?

While the federal government’s third relief package primarily focuses on students and people on pensions or low incomes, the previous two packages of measures were more about relief for households as a whole – for example in heating costs, on the way to work and above all in local transport with the 9 euro ticket. The one-off energy price allowance of 300 euros (gross) was intended as a salary supplement. So broad relief for the “working middle of society”?

Where is the middle class?

In a study last year, the industrialized countries organization OECD and the Bertelsmann Foundation included those in the middle class who earned at least three quarters or at most twice the average disposable income (“median”).

The so-called median income of singles was then around 2000 euros per month. The “lower middle class” would include anyone who can spend or save between 1,500 and 2,000 euros a month on consumption.

For a family of four, the median net income is 50,000 euros per year. Accordingly, the income group of the “lower middle class” would be below this.

Discharges vary

It’s not that simple, as a breakdown of the burden and relief on low, middle and high incomes shows: The German Institute for Economic Research (DIW) has examined how inflation is weighing on the different income groups and how this was absorbed by the first two aid packages – with the result that people with the lowest incomes benefit the most.

But the lower middle class in particular is still being hit hard by the rising prices – and the income groups below it are anyway. The reason: the costs of energy and food have risen the most. In particular, people who earn little would have to spend an increasing proportion of their income on running costs and basic needs alone.

DIW board member Alexander Kritikos assumes that this accounts for up to 70 percent of the money of the lower income groups. The economic researcher includes the costs of food, housing, energy and transport. This affects around a fifth of the population.

Forgot the bottom center?

However, there is one group between the lowest and middle income groups that has not received enough attention in the current tax cuts: “The lower middle class, which has to bear the relatively heaviest burden, will get nothing this time.”

The DIW economist would have advocated more lump sum payments for the lower half of household income, but these are not currently planned. He is also critical of the planned cap on electricity prices: “A fatal signal.” It would be better to reduce the burden on all households up to a certain income, taking into account the number of children, “because this would maintain the incentive for everyone to save energy and relieve those affected in a more targeted manner,” says Kritikos.

The social organizations sometimes see things differently. In principle, they welcome the packages of the traffic light coalition. But VdK President Verena Bentele also takes a look at the lower (middle) classes: “Pensioners with low incomes and employees with low incomes want to get through the winter with their own money, which is why we need gas and electricity price caps for the basic needs – and as quickly as possible.” Because, according to Bentele: “We urgently need constant relief for the lower middle class, which is in danger of slipping because of the high consumer prices.”

“Middle class is doing well”

And the “middle” altogether? After many good years, it is more heavily burdened again, but by no means as badly as the lower incomes. The middle class is in good shape thanks to the past few years of sustained economic growth, small but steady wage increases and near-total full employment, says economics professor Kritikos.

For many, this stability is in jeopardy. There are concerns among students, for example: they too are feeling the effects of rising food prices. In big cities, rents are already high. There are halls of residence with more favorable conditions, but “if you apply now, you will have to wait six months,” reports Sinja Wach, who studies at the University of Stuttgart. And then it’s just a matter of the tense housing market.

Some are already taking out loans, others are selling their cars, report Wach and her fellow students, who are involved in student representation. They are happy about the planned relief, but also look forward to the increasing contributions to the student union, which they will soon have to pay. The food in the canteen is also becoming more expensive, says Marius Lichtl, who studies architecture. The price for a dish, which previously cost 2.59 euros, should be raised to 2.99 euros. The doner kebab on the go or the kilo of peppers in the supermarket are also in question. Overall, the prices made a difference: “You can tell.”