Inequality

From a short-term perspective income distribution has become fairer, but from a long-term perspective it has not. Inequality in the total population has decreased significantly since 2006, and has even dropped to below the level seen in 2000. The reason behind this positive development is that the number of persons that have not yet earned wages, and thus belong to the weakest group in society, has fallen. The core idea of Agenda 2010 and the Hartz reforms were successfully implemented and also lowered inequality in gross real wages.

If the development is observed over a longer period of time, however, a different picture emerges. Income inequality in Germany has risen since the 1970s, but there are several good reasons for this. Firstly, women tend to have different employment biographies, meaning that inequality among them is greater. The fact that a larger share of the female population is now working therefore means that overall inequality is higher. Secondly, inequality among older employees is higher than among their younger counterparts; so inequality has also grown because a larger share of employees is over 50 years of age. The increase in the share of highly-qualified employees has a similar effect.