How rich are the Germans, who has a lot, who has less and, above all, how much are the ratios of wealth changing? From time to time, studies are conducted on these topics, some of which cause great resonance. More often than not, the conclusion is this: the wealth of the super-rich continues to grow, while the underprivileged remain disadvantaged. But is social inequality really increasing?

Germans are richer than people think

Three researchers – Thilo Albers, Charlotte Bartels and Moritz Schularik – analyzed in detail the well-being of Germans and the evolution of their wealth since the 19th century. And one of the results is that the Germans have become richer than previously thought. They became richer by more than 4,000 billion euros, writes Deutsche Welle.

According to the study, how wealth ratios change depends on the time period analyzed. Over the past 100 years, the wealth of the richest part of the population has not grown disproportionately. If in 1895 the richest Germans, who made up one percent of the population, still owned half of the country’s wealth, today they own only 25 percent of the wealth, a quarter of the total.

Two world wars created more capital

This is explained, in particular, by the fact that numerous tycoons lost part of their fortunes in the two world wars. Many businesses and buildings were destroyed during the explosions. In addition, during the interwar period, assets in the form of real estate, stocks, and bonds lost significant value. And the hyperinflation of 1923 led to a significant decrease in the wealth of Germans. And the global economic crisis of the early 1930s led to a decrease in company assets, as many companies either lost their value or were forced to declare bankruptcy.

The balancing of wealth was also encouraged by the so-called Burden Compensation Act, passed in the post-war period, in the 1950s. Those who managed to save significant fortunes after the world wars were forced to set aside half of their value, gradually over 30 years, in a special fund. Those who lost their fortunes in the war received financial compensation from this money. This law made Germany one of the most egalitarian countries in the world at the beginning of the postwar period.

In recent decades, the redistribution of wealth has accelerated

Then, over the past 70 years, the rich have gotten even richer, but the middle class has been able to increase their fortunes just as quickly. This is explained, among other things, by the fact that in the years 1950-1980 more and more people were able to buy and build houses. Thus, the middle class was able to benefit from the ever-increasing real estate prices.

From this perspective, wealth is distributed less unequally than it was before the First World War. Currently, the average wealth of German households is 420,000 euros. But if you analyze how much a household owns, with the remaining half owning more and the other half owning less, the value is only €120,000. This shows that wealth is distributed unevenly – in favor of the wealthier half of the population.

The poor remain poor

Although half of Germans have been able to afford more over the past 40 years, those in the lower income bracket have not managed to improve their financial situation. More precisely, the average wealth of the poor half of Germans at the end of the 1970s was about 20,000 euros – it is at the same level now.

Poor rich Germans

This evolution is explained by the fact that incomes did not increase significantly in the mentioned interval, and the poor could save less money than the rich. Also, the poor did not invest their money in real estate or stocks, but rather in savings accounts or life insurance with low interest rates.

While the wealth of the wealthier half of German households has doubled over the past 25 years, the less well-off half have failed to increase their wealth.