Just under 15% of the population of Germany is considered to be at risk of poverty. These people receive less than 60% of the median income. This income level in a society divides the people or households in it into two parts - half receive a higher income, and the other half - a lower one, explain the Institute for German Economics (IWD). Here are the other data presented by the study.
Uneven distribution of income
The share of those at risk of poverty in the Czech Republic is the lowest in the EU - just over 10%, while in Bulgaria almost 23% of people are relatively poor.
In general, incomes in Bulgaria, Lithuania and Latvia are particularly unevenly distributed, while in Slovakia, Slovenia and the Czech Republic the difference between rich and poor is rather small. In terms of income inequality, Germany ranks somewhere in the middle among the member states of the European Union.
But comparing indicators of income distribution in individual countries has one major drawback: since the data are calculated on the basis of average national incomes, differences in the well-being of individual countries remain unaccounted for.
Bulgaria is second to last in the ranking, led by Luxembourg.
That is why the German Economic Institute has calculated the income distribution throughout the EU - as if the Community were a single country. In order to take into account price differences in individual countries, scientists from the institute use the so-called purchasing power standard (PPS) – it is a unit that shows the income with which consumers in all countries can purchase the same amount of goods and services.
So, if the purchasing power of people in individual countries is taken as a basis, the picture of income distribution changes significantly: Luxembourg stands best in the comparative table, where only 4% of people are relatively poor, and there are a total of 25 percent relatively rich people. Bulgaria occupies the penultimate, 26th place in this ranking (only Hungary has worse indicators). Nearly 58 percent of Bulgarians are at risk of poverty, over 16 percent have incomes that are in the lower part of the EU average, a little over 20 percent receive exactly the average income level in the EU, and 4.3 percent - earn a little more than this average European level. Only 1.5 percent of Bulgarian citizens are relatively wealthy, according to calculations by the Institute of German Economics.
Where is Germany?
In Germany, just over 7% of the population is considered to be at risk of poverty. Only in six other EU countries are there fewer poor people than in Germany – Finland (6th place), Austria, the Netherlands, Denmark, Belgium and Luxembourg (1st place).
The comparative analysis for the entire EU also shows that despite the significant growth in income in South-Eastern Europe in recent years, there is still a significant lag behind the European level. In five EU countries, more than half of the population is at risk of poverty, if the Community's net median income is taken as a basis. These are Greece, Slovakia, Romania, Bulgaria and Hungary.