How much poverty is there in Germany?
Although Germany was the 20th richest country in the world in 2022 according to the International Monetary Fund (IMF), poverty is a serious problem here too. To make this major topic a little more tangible, in this article, we take a look at the questions of what poverty actually means, which groups are particularly at risk of poverty and what can be done to combat poverty.
- What is poverty?
- When is someone considered poor in Germany?
- Current figures on poverty in Germany
- What are the reasons for poverty in Germany?
- Who is particularly at risk of poverty?
- How many children live in poverty?
- What is the German government doing to combat poverty?
- How you can take action against poverty yourself
What is poverty?
Poverty essentially means that there is a lack of resources that severely impairs the quality of life and well-being of those affected. There are numerous definitions of poverty, with the concepts of absolute and relative poverty being the most common in science and politics.
- Absolute poverty means that a person lives below the subsistence level and cannot even afford to meet their basic needs. Basic needs include: Food, clothing, housing and access to medical care.
- Relative poverty , on the other hand, looks at a person’s financial situation in comparison to their social environment. Relative poverty also takes into account social inequalities, some of which are reflected in the fact that the people concerned can only participate in social life to a limited extent for monetary reasons. For the people affected in Germany, poverty manifests itself, for example, in poorer access to education, healthcare and housing.
When is someone considered poor in Germany?
There are various approaches to determining who and how many people are affected by poverty. We present the three most important ones.
Measurement based on the at-risk-of-poverty threshold
The most commonly used method for determining poverty in Germany is to look at the poverty risk threshold. It stipulates that all people who have less than 60% of the median income of the population as a whole are considered to be at risk of poverty. According to the microcensus study on income and living conditions, the threshold value in Germany was in 2022:
- for single people with a net income of €15,000 per year
- for a household with two adults and two children under the age of 14 with a net income of €31,500 per year
In its overview, the Federal Statistical Office also provides further detailed information on previous years and on the at-risk-of-poverty rate for different age groups and genders.
Measurement based on the World Bank’s absolute poverty line
The World Bank’s approach, which is widely used internationally, has set a fixed US dollar amount as a benchmark for measuring poverty. This means that anyone who has less than $2.15 (purchasing power) per day in the respective currency is considered extremely poor. In 2017, the World Bank also introduced two additional poverty lines of $3.65 and $6.85 to reflect the realities of different countries (more information here).
Holistic view through the Human Development Index (HDI)
In addition to income, the Human Development Index also takes into account education, life expectancy and regional/local poverty thresholds in various countries.
It looks at the long-term progress of a country’s population on the basis of three aspects:
- A long and healthy life for people
- Access to knowledge
- An adequate standard of living
The HDI thus goes beyond purely monetary resources and also considers things such as state of health, housing situation and the possibility of personal development. With a value of 0.942 (maximum = 1), Germany is relatively high up on the scale. The United Nations Human Development Report provides more details and comparisons with other countries.
Current figures on poverty in Germany
In Germany, the Federal Statistical Office measures the at-risk-of-poverty rate. According to a press release from March 2023, around 14.7 million people were at risk of poverty in 2022, or around 16% of the population. There has been a clear increase here compared to previous years, particularly between 2018 and 2021.
Looking at the federal states, according to Statista, the at-risk-of-poverty rate in 2022 was highest in Bremen at 28.4%, followed by North Rhine-Westphalia at 19.5% and Saxony-Anhalt at 19.3%. 6.1% of the population, or 5.1 million people in Germany, were affected by significant material and social deprivation in 2022. This means that their living conditions were significantly restricted due to a lack of financial resources. Further data on this topic can be found in the Federal Government’s Poverty and Wealth Report.
What are the reasons for poverty in Germany?
There are various causes of poverty, but they are often linked to a person’s social background. On average, children from socially disadvantaged families have significantly worse starting conditions and fewer resources than those from, for example, disadvantaged families. Academic households.
The dependence of one’s own development on social background is referred to as “social mobility”. This varies from country to country, as the OECD overview shows. This measures how long it takes for the offspring of a family from the lowest income decile (lowest 10 percent) to reach the average income. In Germany, this currently amounts to 6 generations, which speaks for low social mobility in comparison. In addition, there are other factors such as individual life circumstances and events, migration and flight or one’s own family situation, which we will describe in more detail in the next chapter.
Who is particularly at risk of poverty?
As can be seen in the chart from the Federal Agency for Civic Education, there are certain population groups in Germany that are particularly at risk of poverty. We take a closer look at some of them here.
Unemployed people
Over 49% of people without a regular income are at risk of poverty in Germany, making them the largest group of those affected. This most frequently affects those who are unemployed for a longer period of time or who fall into unemployment from the low-wage sector. Anna Mayr, journalist and author of the book “Geld spielt keine Rolle” (Money doesn’t matter), says in an interview with Deutschlandfunk: “The most important thing in our society is work. And it is precisely this focus on work that turns the unemployed into outsiders.” At the same time, having a permanent job does not rule out the possibility of falling into poverty, as around 9% of people in employment are also at risk of poverty.
Single parents
At 42.3%, they are the second largest group at risk of poverty. Once again, women are significantly more affected than men. Single parents are exposed to a higher risk, as they are doubly burdened without a strong family network. On the one hand, they have to provide for themselves and their children, and on the other, the maintenance to which they are actually entitled is often not paid. A study by the German Youth Institute shows that of the children for whom maintenance payments have been determined, 37% receive no or only incomplete maintenance from the other parent.
People with a low level of education
According to the Federal Statistical Office, they are 39.8% more prone to poverty as they are more likely to work in the low-wage sector. In 2018, around 20% of employment relationships in Germany were in the low-wage sector, putting Germany in fifth place out of the 27 EU countries (more on the EU comparison). These people fall into the so-called “low-wage trap”. Although they work full-time, their salary is not enough and they only receive a small pension in old age.
People with a migration background or without German citizenship
According to the Federal Agency for Civic Education, people with a migration background are more than twice as likely to be poor (27.8%) as people without a migration background (11.7%). There are major differences. If they do not have German citizenship, for example, their risk of poverty is over 10% higher than for those with German citizenship. At the same time, the country from which they themselves (or their parents) have immigrated also makes a big difference. People from Syria, Iraq, Pakistan and Afghanistan, for example, are more at risk of poverty. The causes include, among other things, a lower average level of education and vocational training, language barriers, limited recognition of qualifications, a limited length of stay and more frequently poorly paid jobs.
Pensioners
In the group of people aged 65 and over, 18.2% are at risk of poverty. Single people and women in particular suffer from financial insecurity. The serious difference to other groups is that poverty in old age is often final and people cannot find a financial way out. In 2021, the Federal Ministry published a study on “Old age in Germany (D80+)” for the first time, which showed that 22.4% of over-80s are affected by poverty. This figure will continue to rise in the future due to increasing life expectancy.
Women
Women in Germany are slightly more at risk of poverty than men in all age groups. In 2021, 17.8% of them were affected, compared to 16% of men. One key aspect is that women are more likely to work part-time for family reasons and therefore earn less. As a result, women have lower pension entitlements and are therefore more affected by old-age poverty, among other things. Added to this is the gender pay gap, which, according to a study by the Federal Statistical Office, shows that women still earn on average 7% less per hour than men for comparable jobs, qualifications and employment histories.
How many children live in poverty?
According to the Bertelsmann Stiftung ‘s factsheet “Child and youth poverty in Germany”, more than one in five children, i.e. almost 3 million children, were at risk of poverty in 2021. The risk of poverty is particularly high in families with single parents or with more than two children (see Chapter 5).
One of the main reasons for this is that the parents’ financial situation has a direct impact on the children. This means that if parents work in the low-wage sector or are dependent on social benefits, there is, simply put, little left for the children. Due to their income situation, they often suffer from an unhealthy diet, poorer educational opportunities and less social participation and often feel the effects for the rest of their lives.
This dependency is also reinforced by the fact that any additional income earned by the children is offset against the parents’ social benefits. It was therefore hardly worthwhile for her to take on a part-time job, as monthly additional earnings of over €100 were almost entirely subject to crediting. This changed with the amendment to the law on July 1, 2023, according to which additional income of pupils, trainees and students up to €520 is exempt from offsetting (more on this here).
According to a survey of children and young people (aged 10-17) conducted by the Deutsches Kinderhilfswerk in 2023, another main reason for the persistence of child poverty is the lack of support and encouragement in education.
What is the German government doing to combat poverty?
Germany is a welfare state, as enshrined in the Basic Law(GG Articles 20 and 28). “This means that the legislator in the Federal Republic must also take care of social justice and the social security of citizens,” writes the German Bundestag. Germany therefore has a range of measures in place to prevent or alleviate poverty.
Unemployment benefit (Arbeitslosengeld)
People who lose their job and meet certain requirements receive unemployment benefit from the Employment Agency after applying for it. This is based on the average gross salary in the year prior to the application (to the Employment Agency).
Citizen’s income (Bürgergeld, ehemals Hartz 4)
Citizen’s income is available to people who (temporarily) have no income or whose income is below the minimum subsistence level. The application is made via the Jobcenter and the amount depends on the family status and living situation (to the Jobcenter).
Social welfare (Sozialhilfe)
People who are temporarily unable to work and who are not entitled to either unemployment benefit 1 or citizen’s allowance can apply for social assistance. Social assistance can be applied for at the social welfare office in your place of residence (more here).
Housing benefit (Wohngeld)
The housing benefit subsidy is intended to enable people to receive financial support for their accommodation without having to apply for citizen’s allowance or social assistance. The applications are not as extensive as for citizen’s allowance or social assistance and are therefore easier to apply for (more here).
Child benefit (Kindergeld)
Since January 2023, parents have received child benefit of €250 per child until the child is a maximum of 25 years old. There is also the immediate supplement, which children, adolescents and young adults affected by poverty receive an additional €20 per month. Child benefit is applied for at the family benefits office (more here).
Basic child support (Kindergrundsicherung)
Basic child protection is expected to start in January 2025 and will protect children from poverty and ensure equal opportunities. The cabinet approved the bill in September 2023, but it still needs to be approved by the Bundestag and Bundesrat (more here).
Student grants (BAföG)
BAföG provides young people with financial support for training or studies. This is a non-interest-bearing loan that does not have to be repaid in installments until 5 years after the end of the standard period of study or training (more here).
Basic pension (Grundrente)
The basic pension is a supplement to the pension. The prerequisites are that you have 35 years of basic pensionable service and still only receive a small pension. There is no need to submit an application to receive it; the basic pension entitlement is checked automatically (more here).
Minimum wage (Mindestlohn)
Germany has had a minimum wage since 2015, which currently stands at €12 gross per hour (as of December 2023). This is stipulated by law and is intended to prevent people from falling into poverty despite being employed.
How you can take action against poverty yourself
In addition to state institutions, many charitable organizations are also committed to helping people at risk of or affected by poverty. And you can support them. For example, by accompanying children and young people on their educational journey as a mentor, helping newcomers to arrive in Germany with a sponsorship or helping to care for people in need in food banks, clothing stores or emergency shelters.
At vostel.de there are countless ways in which you can get involved in the fight against poverty and for more equal opportunities in Germany.
Your team from vostel.de
wishes you every success with your commitment against poverty in Germany!
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