Election2017 inequality ZEIT ONLINE op-ed column

In Germany, the poor are getting poorer

This text was also published in German in  ZEIT ONLINE on March 3rd  as part of the op-ed column “Fratzschers Verteilungsfragen“.

Recently, the Federal Government will soon present its fifth official Poverty and Wealth Report. But early leaks revealed the removal of passages concerning the richest citizens’ disproportionate political influence had already triggered widespread public outrage. Such an omission is especially troubling given that broad political participation – critical for a functional democracy – is lacking in Germany. In fact, Germany has one of the most unequal distributions of political influence among all of the industrialized countries.

On Thursday, a federation of organizations active in the social sector presented its own annual poverty report – and despite Germany’s solid economic development, the country’s poverty risk is higher than ever before. To rectify this pressing issue, we must first and foremost address the roots of social inequality; only then can politicians earn credibility, avert economic damage, and prevent the spread of populism. The elites must no longer be permitted to sweep this issue under the rug. It must be swiftly brought into the public discourse and a solution must be pursued.

It is not surprising that people with high levels of wealth and income have a more powerful influence on politics than do socially weak and low-income citizens. But Germany’s troubling election participation rates, in which 90% of the country’s top earners but only 65% of the lowest-income individuals vote, reveal a 25-percentage point difference between rich and poor that is twice the average of all industrialized countries and five times higher than in Sweden and Denmark. Other indicators paint a similarly unsettling picture for Germany.

The causality here is mutual: a high level of inequality when it comes to opportunities, income, and wealth means that fewer and fewer people are taking part in politics. Politicians naturally become less interested in the needs of those who do not participate, which in turn exacerbates inequality. This leads to a dangerous downward spiral in which unequal political participation and social inequality feed into each other.

There are signs that such a feedback loop has already been in existence for a while: today, more and more Germans are at risk of poverty, with a share that has risen significantly over the last 20 years, from 10% to over 15% of the entire population. Certain population groups, such as those dependent on government transfers and exhibiting lower levels of societal participation, are especially at risk.

Low levels of political and social participation are also associated with lower levels of economic participation. Politicians are thus paying less attention to the interests of the most economically vulnerable. One example is the Federal Government’s major pension reforms from 2014: neither lowering the retirement age to 63 for some workers nor the implementation of a special regime for women who have already raised children (Mütterrente, mothers’ pension) have done anything to help those in need. They were first and foremost the products of client politics aimed at the key electoral groups of the two political parties – that is, people who are typically less dependent on such aids. And although the introduction of the minimum wage in January 2015 raised the income of many workers, it ultimately doesn’t significantly reduce the size of the low wages sector. What’s more, 2.7 million people are still registered as unemployed – including 1 million long-term unemployed – and their interest have been largely ignored in the labor market reforms over the past 15 years.

When it comes to two of the most important topics of the upcoming election – pensions and tax cuts – the competing parties should prioritize the needs of the people who are the most dependent on state support. The client politics however, reflect the perfectly normal behavior of a political party in a democracy: it attempts to win votes by making promises to as many voters as possible. People who do not vote thus have no voice or political influence. Instead of spouting campaign promises of tax cuts and pension increases, politicians should concentrate on the causes of uneven political participation: the high levels of inequality when it comes to opportunities, assets, and income in Germany.

The better off everyone is socially and economically, the more they can contribute to and be included in political and societal decisions. Populist rhetoric will lose its appeal as people feel less marginalized and thus less drawn to extreme political parties (the rise of the AfD, for example, feeds on its appeal to angry non-voters or dissatisfied voters who feel unheard in politics). For this to work, however, policy must openly and honestly address the problem of social inequality and offer concrete solutions. Only then can we ensure long-term political participation and thus a proper functioning of our democracy.

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