Economic study shows German pay slips at all time low

29th November 2007, Comments 0 comments

29 November 2007, Berlin - Despite a reviving economy, paid work is now the source of less than 40 per cent of private income in Germany, the lowest rate in the nation's modern history, a leading economist warned Thursday.

29 November 2007

Berlin - Despite a reviving economy, paid work is now the source of less than 40 per cent of private income in Germany, the lowest rate in the nation's modern history, a leading economist warned Thursday.

Author Claus Schaefer, of the trade-union-funded Hans Boeckler Foundation, blamed the trend on low-paid jobs, saying in Berlin that it meant Germany's export-led economy could not count on domestic spending by the masses for growth.

His analysis, based on federal statistics, found just 38.8 per cent of household income after tax and levies was derived from work, while 25 per cent was welfare handouts and 36.6 per cent dividends.

Schaefer said that work's share during the first six months of this year was the lowest since the statistics began in 1960, when the rate ran at 56 per cent. Most dividend income goes to the rich only.

He said pay hikes had failed to change the trend because they were eaten up by inflation.

The rising income of Germany's rich and the declining income of the poor has emerged as a hot issue in German politics in the past year.

In an interview published Thursday, German President Horst Koehler assailed the growing income gap and rising executive remuneration, saying it was bringing an alienation between business and society as a whole.

"Business leaders have to got to grasp that their actions have an effect on social cohesion," he told the newspaper Handelsblatt, calling for a "culture of moderation" among business leaders.

"Just fulfilling corporate earnings targets does not make you a good manager," said Koehler, who called for businesses to distribute part of their profits to staff.

DPA

Subject: German news

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