Inequality - From a Suppressed Topic to a Wealth Simulator
There are statistics on everything in Germany - but when it comes to income and wealth, things look bleak. We want to change that.
PUBLISHED31. OCTOBER 2023
READING TIME3 MIN
In Germany there are statistics on all sorts of things – on the sale of cut flowers or the prices of light metals. Inflation is reported in detail twice a month. What is curious is that there is virtually no current and complete data on what is actually a rather explosive topic: the distribution of income and wealth. Most of what is known about the full extent has been estimated by researchers over the past 20 years.
If you look for the reasons for this, you will find evidence that suggests one thing: that it was not politically desirable to know more about it. While there was more research on poverty in the US and Britain in the 1960s, the belief in “prosperity for all” seemed to be deeply rooted in Germany, writes historian Felix Römer. If there were statistics on inequality at all, for a long time they came from researchers outside Germany, says Charlotte Bartels, now one of the country’s most renowned inequality experts. And the desire to produce official statistics was repeatedly rejected by politicians.
What you don’t know can’t hurt you? According to Römer, it was only in retrospect that it became statistically known that in Germany “the income share of the top ten per cent had already risen above the European average in the 1970s”, while the share of the bottom half was falling. It was not until 2001 that the German government’s poverty and wealth report was published, which again focused heavily on poverty. The concentration of wealth is another matter.
Many gaps have been filled in recent years by private estimates, for example by researchers at the SOEP. The catch is that official statistics are still lacking – which in turn means that ministries are reluctant to base their analyses on them. Even so, there are still gaps. We will try to fill one of them in ten days’ time by presenting a wealth simulator for Germany that we have developed together with Charlotte Bartels and Timm Bönke.
The interactive tool can be used to calculate how a wealth or inheritance tax would affect the actual distribution of wealth in Germany in the coming years. Or how it would change if starting capital were distributed to 20-year-olds instead. Again, official statistics alone would not be able to determine this – a shame for a country that otherwise produces all kinds of statistics.
The simulator is presented on a website where you can also find all sorts of things that are now known about income and wealth inequality in the country. Latest data.
The event on 9 and 10 November will feature the world’s leading inequality researcher Branko Milanovic, the Economics Minister’s chief economist Elga Bartsch, former CDU Secretary-General Mario Czaja and former SPD leader Norbert Walter-Borjans.