2022 was the year of rapid inflation. However, according to the poverty report of the General Parity Association, the poverty rate hardly changed at all in the crisis year. The reason for this is the definition of “poverty”.
14.2 million people were considered poor in Germany in 2022. This is reported by the Joint Association of Welfare Services. “Poor” here refers to any person whose income is more than 40 percent below the usual average income in Germany.
According to this definition, only around 100,000 more people were affected by poverty in 2022 than in the previous year. In contrast to this is the perceived reality of many people when shopping or looking at energy suppliers’ price lists. The food banks, which give out free food to those in need, also reported a rush. And the federal government spent billions to reduce the burden, especially for lower income groups.
According to the Paritätischen report, almost nothing actually happened in terms of poverty in Germany in the crisis year of 2022. Ulrich Schneider, head of the Paritätisches, calls the findings “mixed” in view of the stagnating numbers. 16.8 percent of people were considered poor in 2022 – after 16.9 percent in the previous year.
More poverty through higher wages?
How can that be, considering the price increases? The reason is the calculation formula: As long as people in Germany earn at least 60 percent of the average income, they are not poor – according to the association’s formula. The equation can lead to strange effects.
In purely mathematical terms, for example, the number of poor people would decrease if there were a slump in higher incomes – and the average income falls. The consequence would be that fewer people would be below the 60 percent threshold and, in purely mathematical terms, there would be fewer poor people, although the number of low-income earners would remain unchanged.
Ulrich Schneider, head of the Paritätisches, is open about the limited significance of his figures. He admits that the report only provides an insight into the relative poverty situation: “Inflation is not included in the statistics. The fact that the poor are much poorer does not appear in these statistics.” So it seems that there wasn’t much poverty in 2022.
For 2023 and 2024, the formula could show its pitfalls again. The reason is the sharp rise in collectively agreed wages. Schneider says: “If unions achieve high degrees and middle incomes rise sharply, then it can happen that there is more poverty.” Relatively speaking, at least.
Brandenburg is not poor, but Bremen is very poor
The current report confirms trends from previous years. The state of Brandenburg is doing surprisingly well: it has the third lowest poverty rate of all states, behind Bavaria and Baden-Württemberg.
“Berlin’s suburbs play into this. Bremen has the same effect – only in reverse. Many high earners here move to the surrounding area in Lower Saxony,” explains Schneider. With the highest poverty rate of 29.1 percent, the Hanseatic city is far behind in last place.
Schneider emphasizes that poverty is not just a problem for the unemployed. According to his figures, pensioners, single parents and those with low incomes are particularly affected: “That’s the problem. We are demanding a 15 euro minimum wage to help the ‘working poor’.”
For single parents, the parity committee primarily calls for improved childcare. “This helps against so-called forced part-time work. We are missing 400,000 kindergarten places,” says Schneider.
And he calls for more money for pensioners, who make up almost a third of all poor people: “We need citizens’ insurance that includes a minimum pension – and a system into which everyone really pays.” By this he also means the self-employed and civil servants.