Prior to the new German government taking office, the social divide in Germany was already wide. The former federal coalition of the Social Democratic Party (SPD), Greens and Free Democratic Party (FDP), which liked to describe itself as a “centre-left government,” pursued the redistribution of income and wealth just as brutally as its predecessors under Angela Merkel (Christian Democratic Union, CDU) and Gerhard Schröder (SPD). The latest Paritätische Armutsbericht (Paritätische Poverty Report) paints a devastating picture of the result.

According to the report, 13 million people in Germany live below the poverty line. The proportion of poor people in the population rose again last year by 1.1 percent to 15.5 percent. Taking into account constantly rising rents, more than one in five people in Germany is now at risk of poverty.

At the same time, the number of billionaires and super-rich is increasing. According to a new Oxfam report, CEO salaries worldwide have risen by 50 percent in five years, 56 times more than the average wages of employees. In Germany, the median salary of top managers has risen to 4.4 million euros—30 times higher than the average wages of all employees.

A tiny minority of around 0.6 percent of the population now owns 45 percent of total wealth in Germany. More and more, the situation is reminiscent of the conditions before the French Revolution, when Jean-Jacques Rousseau wrote 270 years ago:

Are not all the advantages of society in favour of the powerful and rich? Are not all lucrative professions occupied by them alone? Are not all favours and tax exemptions reserved for them? ... How different is the picture of the poor! The more humanity owes them, the more society denies them: all doors are closed to them. (Jean-Jacques Rousseau, “Discourse on the Origin and Basis of Inequality,” 1755)

Although society has immense resources to eliminate poverty, the opposite is happening: 13 million people no longer have enough income to properly participate in society.

Many withdraw because they cannot afford to go out to eat with friends and family once a month, go to the cinema or take part in paid leisure activities. They are unable to pay their rent, bills and loan instalments on time and cannot afford holidays or a car. The elderly often lack the money for glasses or hearing aids, while younger people have to do without basic necessities such as the internet or a mobile phone. Any unexpected expense throws people completely off track. Faster than they think, they can end up at the food bank or, even worse, homeless on the streets.

The unemployed are particularly affected by poverty, with over 60 percent considered poor according to the poverty report. The following groups are also at high risk of poverty:

• 18 to 25-year-olds: In this age group, almost one in four people (24.8 percent) are considered poor, with girls and women (26.9 percent) particularly affected. This means that young people, the most important group in any society for determining the future, are being deprived of many opportunities that they need for their lives and development.
• Many pensioners are also poor: almost one in five (19.4 percent) aged 65 and over are affected by poverty. Pensioners account for more than a quarter of all poor people in Germany. Here, too, women are particularly affected with over 21 percent of all women over the age of 65 considered poor.
• Regarding households, single people (29 percent) and single parents (27 percent) stand out in particular.
• In addition, people without German citizenship are also severely affected, with around 30 percent considered poor.
• People with disabilities and chronic illnesses are also very often poor. Their numbers are not listed separately, as they are included in the 44 percent of people who are not in employment.
• Looking at the country’s individual federal states, Bremen (25.9 percent) and Saxony-Anhalt (22.3 percent) are particularly affected by poverty, with around one in four considered poor. However, the report does not list the actual hotspots of poverty individually. For example, North Rhine-Westphalia has a poverty rate of 17.4 percent, while some cities in the Ruhr area—Duisburg (28.5 percent), Essen (29.4 percent), Dortmund (28.2 percent) and Gelsenkirchen (as high as 37.9 percent)—are well above this figure.

The figures clearly show that the protective benefit of social assistance has been declining recently with the poverty report providing clear evidence. In 2021, the poverty rate was reduced by 27.7 percentage points to 16 percent through state redistribution. Without social benefits, it would have been 43.7 percent. In 2024, the poverty rate fell to 40.6 percent due to the increase in the statutory minimum wage, but social benefits only reduced it by 25.1 percentage points to 15.5 percent. The statutory minimum wage has therefore hardly reduced poverty, but only relieved the burden on the state coffers.

One factor that has significantly exacerbated poverty is inflation since the outbreak of the coronavirus pandemic. The consumer price index rose by almost 20 percent (to 119) between 2020 (=100) and 2024. And real wages are actually declining. In 2020, they fell by 1.2 percent and in 2022 by as much as 4 percent! The latter is the result of the policies of Germany’s trade unions, which, out of consideration for the “German economy,” have been sabotaging all wage struggles for years, thereby contributing significantly to the development of poverty.

The poverty line is currently set at €1,381 per month for single people; for a family of four with two children (under 14), it is €2,900. However, this is only the upper threshold at which people are considered poor. A great many poor people live well below this threshold. The poverty report states: “5.2 million people have to live in considerable material deprivation. This includes around 1.1 million minors and young people and 1.2 million full-time workers.”

In relation to the total number of poor people in Germany, the proportion of those in employment is 19.9 percent. In other words, one in five poor persons is in regular employment but earns too little to live on. More than two and a half million people belong to this category of working poor.

And their situation is getting worse: if you compare the development of the median income of the poor with price developments, it becomes clear that the poor have become even poorer in real terms since 2020. In 2020, the poor had an average monthly income of 981 euros. In 2024, the average was 1,099 euros, which, adjusted for inflation, corresponds to a median income of 921 euros, significantly less than four years ago.

In contrast to this misery, the Oxfam report, published punctually on the eve of 1 May, paints a completely different picture. It focuses on the salaries, bonuses and incomes of top managers. As it shows, CEO salaries have risen 56 times as much as the real wages of dependent employees over the last five years. Worldwide, the median average salary of CEOs has risen by 50 percent and amounted to no less than 4.3 million US dollars in 2024.

For its analysis, Oxfam looked at the remuneration packages of almost two thousand CEOs in 35 countries. These included 56 CEOs from Germany who received more than one million US dollars last year, including basic salary, bonuses and stock options. Their median salary in 2024 was 4.4 million euros, 21 percent higher than in 2019. In contrast, the real wages of workers and employees rose by only 0.7 percent over the same period, 30 times less. Oxfam writes:

The fault lies in the system: while corporations are geared towards increasing profits for CEOs and shareholders, workers are struggling with stagnating wages and have to ask themselves every day how they can still afford rising rents and food prices.

Both Oxfam and Paritätische offer recipes in their reports for how the unprecedented and ever-accelerating redistribution of income from the bottom to the top could be stopped. However, these “proposed solutions” are completely inadequate.

Oxfam calls for taxation of the super-rich, the introduction of higher top tax rates and fairer wages—but says nothing about how today’s extreme polarisation came about. The Paritätische report points to the protective effect of the minimum wage, rent controls and the welfare state and naively proclaims: “The Federal Republic of Germany has committed itself at the international level to actively combat poverty.”

While these organisations vividly illustrate the increasingly dire reality of the rich and poor, they turn a blind eye to what is really happening: following the Trump administration’s arrival in power in the United States, a government committed to the capitalist oligarchy is also coming to power in Germany led by former BlackRock banker Friedrich Merz.

In the interests of businessmen, shareholders and the super-rich, this government is preparing Germany for the next major war and massive attacks on the working class. It consists not only of CDU/CSU (Christian Democratic Union/Christian Social Union) ministers but also of SPD ministers and is supported by the trade unions, the Left Party and the pseudo-left.

The coalition agreement already contains social cuts and attacks on the poorest in society, welfare recipients and refugees. In addition, all social projects are subject to “financial constraints,” meaning they will inevitably fall victim to budget cuts as soon as the crisis deepens or a coming war supposedly requires it.

The only way to take up the fight against poverty is to mobilise the working class independently. Only in alliance with the international working class can it defend its social and democratic rights. The programme necessary for this has been presented by the International Committee of the Fourth International (ICFI) and its German section, the Socialist Equality Party, on Saturday at the International May Day Online Rally.