A study by the Bertelsmann Foundation has revealed that Germany’s middle class population has been shrinking since the 1990s. However, the new government plans to rectify the situation.

German middle class has been shrinking since 1990s

A new study by the Bertelsmann Foundation has revealed that Germany’s middle class began to shrink in the mid-1990s and continued to do so up until 2015. The results of the study correspond to the findings by the Organisation for Economic Cooperation and Development (OECD), which show that the percentage of middle class people in Germany fell from 70 to 64 percent between 1995 and 2018.

Despite economic growth and falling unemployment rates, Germany’s middle class has not fully recovered in the years since 2015. In fact, the last six years has seen the number of people in the lowest income group - that is people earning less than 50 percent of the median income - grow from 7 percent to 10 percent.

Pandemic may have worsened middle class exodus

There are signs that the middle class may have been adversely affected by the coronavirus pandemic, which might even suggest that Germany’s middle class started shrinking again after 2018. The pandemic led to lots of people losing their jobs in Germany, particularly those earning middle incomes. The German Institute for Economic Research and the Bertelsmann Foundation calculated that around 8 percent of people earning middle incomes in Germany before the start of the pandemic in 2019 had lost their jobs by January 2021.

A strong middle class is often seen as the anchor for a solid economy, a prosperous society and the mark of a strong welfare state. However, a booming population, higher standards of education and specialised courses at universities and colleges mean that it has become increasingly harder for Germans to enter the middle class.

In fact, the Bertelsmann study suggests that young Germans now have fewer opportunities than the previous generation, who were mostly able to enter the middle class when they started working, between the ages of 20 and 39.

SPD-led government to strengthen middle class

Germany’s new government, led by the centre-left SPD, wants to strengthen Germany’s beleaguered middle class by increasing minimum wages, investing in digital infrastructure and expanding vocational and professional training opportunities. The Bertelsmann Foundation’s study suggests that, in particular, expanding training opportunities is a way to increase social mobility.

The study does, however, criticise the expansion of “mini-jobs” - a type of marginal employment that pays less than 450 euros a month, with little opportunity for career advancement.