Low Earners and Self-Employed Suffering Particular Economic Hardship In the Covid-19 Pandemic in Germany
The economic situation for low-wage and self-employed workers in Germany has deteriorated during the coronavirus crisis. This is according to the latest analysis conducted by the ifo Institute. A pivotal factor is these workers’ ineligibility for short-time allowance. “Neither the self-employed nor low-wage earners pay unemployment insurance contributions, and we are now seeing the effect,” says Andreas Peichl, Director of the ifo Center for Macroeconomics and Surveys.
Back in June 2020, low earners stood a 20 percent chance of experiencing a drop in income. This means the crisis is hitting them significantly harder than part-time and full-time workers. For these groups, that figure was around 13 percent for the same period. In June 2020, the self-employed actually had to contend with a 33 percent chance that their income would fall. In October and November, there was still a 7.3 percent chance of this. Despite this positive trend, respondents from these groups remain anxious about their financial situation. This is reflected in the analysis of comparisons with other workers.
In addition to financial losses, Germany’s population fears contracting Covid-19. Women are especially worried about infection; they now voice this concern three times more often than they did at the start of the survey period in June 2020. By way of contrast, elderly people – who back in June 2020 were especially worried about infection – reported in October and November that they were far more relaxed than at the start of the pandemic. “This perception tallies with the drop in relative infection rates for this group at the end of 2020,” says Lea Immel, a doctoral student at the ifo Institute and member of the Research Group Taxation and Fiscal Policy.
