Poverty Looms Over One in Eight Germans, Official Survey Shows

from Bloomberg

By Brian Parkin

About one person in eight in Germany is threatened by poverty, according to a survey conducted for the first time by the Federal Statistics Office.

In 2004, penury loomed over 10.6 million people whose monthly net income is 60 percent or less than a national mean of 1,427 euros ($1,891), the office said. That's about 13 percent of the 82 million people in Europe's biggest economy. Poverty may have even spread in 2005, said the office's deputy president.

Income levels show that ``aspects of life in Germany are closed to some people,'' the office's Deputy President Walter Rademacher told reporters in Berlin. The threat of poverty may have grown last year after cuts in jobless benefits, he said.

Germany has cut jobless benefits for people unemployed for more than one year and raising value-added tax next year to shore up government finances. Growing poverty may hurt domestic demand, reducing potential economic growth even as jobs are creased.

A public debate dominated media earlier this year over whether chronic unemployment and diminished welfare benefits have created a so-called ``underclass.'' Some 43 percent of people threatened by poverty are unemployed, said Rademacher. About 8 percent of those at risk have a college degree.

The survey follows a promise made in 2000 by the then-15 member European Union to alleviate poverty by the end of the decade as the trade bloc realized its aim to become the fastest- growing knowledge-based continent.

Based on data from 2003, Germany is ``about midfield'' alongside France, Austrian and Belgium among the EU's original 15 members, said Rademacher. At-risk groups in Scandinavia were smaller than in Germany, he said.

Citing data from this year, the Labor Ministry last month said some 6.9 million Germans depend directly or indirectly on monthly welfare checks of 345 euros ($459) that are paid to the long-term unemployed. About 1.7 million of those at risk are children, Rademacher said.