The middle class in Germany: A dwindling group?

The middle class has recently been the subject of heated debate in light of planned cuts to parental benefits: Who belongs to the middle class, and how is it defined at the top and bottom? In a recent study, the Ifo Institute examined these questions and the current development of the middle class. First, let's look at the definition: According to the OECD, all households with an income between 75 and 200 percent of the median income belong to the middle class. In Germany, this represented 63% of households in 2019—a decline compared to 2007 (65%). This seemingly small decline is quite “significant” compared to other European countries, according to a researcher at the Ifo Institute. The reason for the decline is social mobility—both upward and downward. However, the data analysis does not yet include the last few years and their crises—pandemic, war, inflation—which is why no statements can be made about their impact on the middle class at this time. Nevertheless, it is striking that in terms of self-perception, significantly more people classify themselves as middle class than actually belong to it: over 80% of Germans are convinced that they belong to the middle class, according to a recent study. Marcel Fratzscher comments in Die Zeit on what this (potentially) says about society's attitude toward wealth and shame.

We were also interested in these topics:

• Young generations: The much-discussed characteristics of Gen Z in the labor market are also a recurring topic in this newsletter. Now, a commentary in the SZ questions whether there really are such massive conflicts with older generations, as is often claimed. At the same time, the next younger generation is already getting ready for the labor market: t3n has analyzed what defines Generation Alpha.

• AfD and the economy: An election victory for the AfD could also lead to serious changes for the economy and skilled trades. The Tagesschau asked East German companies in particular how they view the party's current high poll ratings in this regard.

• Student jobs: A study by the German Economic Institute found that young people from wealthier families in particular earn extra money through part-time jobs while still at school. The SZ has summarized why this is the case and in which areas students are working.

• Ukrainian refugees: Around 18% of Ukrainians who have fled to Germany are now in employment – many of them in jobs for which they are formally overqualified. Almost half work in jobs that do not match their actual qualifications, according to a survey.

• Unemployment: The summer break has also reached the labor market in the form of rising unemployment. ntv knows which regions are not affected and why young people in particular have good job opportunities.

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