Whereas in 2000 Germany had arguably the lowest income inequality in the world, it has now fallen behind the Czech Republic, Sweden and Denmark.I must look at my old notes on such topics as balanced growth equilibrium and factor augmenting technical change. We are probably living in a world where the sufficient conditions for the stylized facts of economic growth no longer apply, and their absence is more than theoretical.
The report does however emphasise that Germany is still one of the most equal countries in the world when it comes to disparity in earnings, due to its progressive tax system.
The figures show that, whereas in 2000 the top 20 percent of earners were taking in 3.5 times the amount of those in the bottom 20 percent, that ratio has now increased to five times.
Earnings in the bottom ten percent of German society actually decreased significantly in real terms across this period, with an increase in earnings of 6 percent clearly being outpaced by a 24 percent rise in consumer prices.
In contrast the top of German society saw earnings increases of 39 percent.
THE RETURNS TO HUMAN CAPITAL.
In relatively egalitarian Germany, the rich might be paying a greater share of the taxes, and yet the rich are getting richer.