Work protects against poverty. That is one of the findings of a study on income distribution in Germany. Refugees and people without work are at a far higher than average risk of poverty, and this risk has risen significantly. Almost two-thirds of refugees are at risk of poverty. That is another finding of a study by the German Institute for Economic Research (DIW) in Berlin.
On the one hand, inequality in gross hourly wages has declined. The DIW attributes this primarily to “positive developments at the lower end of the wage distribution”. Various reforms in the labour market, such as the introduction of the minimum wage, “seem to be having an effect”, according to DIW researcher Markus Grabka.
Inequality remains
On the other hand, household disposable income has not improved. In fact, inequality has been increasing since 1995. It has been stagnating since 2020. One reason for the inequality is the rising number of part-time workers, who often earn lower wages. Another is that some employees receive special payments in addition to their income. These payments are higher the more the employees earn.
Work protects against poverty
The risk of poverty has increased significantly, especially among the unemployed and refugees. The rate rose to just under 64 per cent among refugees in 2020. However, the poverty risk rate among refugees has been falling slightly since then—which Grabka considers “good news”. The economist explains that this development is likely due to increasing integration into the labour market. The poverty risk rate for households in which no one is employed has also risen sharply. It is clear that “work protects against poverty”. The researcher therefore calls for “greater promotion of the integration of certain groups into the labour market”.
See
https://www.diw.de/sixcms/detail.php?id=diw_01.c.982202.de&template=diw2_pinuts_newsletter
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