this post was submitted on 07 Feb 2025
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That's the poverty risk and I agree that this is lower in Germany, but it says very little about the direct wealth inequality.
Poverty risk is part of the direct wealth inequality. If you're much more likely to fall into poverty, you're going to have higher levels of poverty, and thus a wider gap
Not directly, but yes if it happens to enough people over time it can have an effect. But please see my other post further up where I looked up the actual numbers and Germany even surpassed the US in the Gini coefficient not that long ago and while the US has recently overtaken again the difference really isn't that big.
I don't know if others have mentioned this already, but the Gini coefficient has flaws, especially when comparing very different economic models (which the USA and Germany have). It would work better for comparing Kentucky to California for example, or Hesse to Bavaria. Not only that, but the Gini coefficient is more sensitive to changes in the middle of the income distribution than at the extremes. This means that significant changes in the income of the middle class may not significantly affect the Gini coefficient, while changes among the very rich or very poor might. It also focuses solely on relative income distribution and does not account for the absolute levels of income. Two countries could have the same Gini coefficient but vastly different average incomes, leading to different living standards.
The accuracy of the Gini coefficient also depends on the quality and comprehensiveness of the data used. In many countries, like the USA especially with its tax loopholes, income data may be incomplete or unreliable (and it'll only get more unreliable with Musk in charge). And we already covered how it doesn't cover issues like access to healthcare, education, etc that all cause and help perpetuate a wealth gap.
Yes I agree that it needs to be questioned, but I think you are also overlooking a lot of poverty issues in Germany. First of all the rich in Germany really like to hide their riches both practically and also in regards to taxation and secondly the majority of the people in Germany do not own the flat or house they live in, resulting in huge wealth gap and constant wealth transfer via rent payments.
I think I would agree that in terms of absolute poverty at the fringes and extreme (display) of wealth the US is much worse than Germany, but when it comes to structural inequality and near inescapable dependency of the poor in relationships that can be described as wage-slavery Germany is actually not looking good at all.
I think there's some misunderstanding.
I'm not saying there isn't a divide in Germany - there is - I'm saying there isn't as wide a gap between the USA and Germany.
I think part of the issue with the comparison overall is the size of the two countries, as well as again that there's things that the Gini Coefficient doesn't factor well. USA has significant chunks of places where people own a home for example, but they are houses that would be (rightfully) condemned in Germany because they are so dilapidated and unsafe / unhygienic to live in. There are places that literally have mud floors in the state of Maine, or basements filled to the brim with toxic mold from previous floods in Mississippi. In these cases, such ownership properties become a generational burden instead, because there's essentially no market value for them but they also require significant capital in order to repair (assuming they can be repaired).
The other thing is that while in Germany (and other EU countries) many people rent rather than own, there's some key important differences that matter a lot here:
This is why you see massive towns of homeless people in the USA but not Germany, in part - at least people can find a place to live. And I do mean literal towns of homeless people.
Yes, you can find cheap housing in the USA too with homes that are in good condition - but they're usually in the middle of nowhere, with essentially zero local job or business opportunities. And you have to remember that in order to travel anywhere in the USA, you will need a car.
As for the rich hiding their wealth, they do that everywhere in the world. But your tax laws are at least still stricter than the USA ones (even more so now).
Lastly, we actually agree that there's a bigger wealth gap in the USA - that's what the "terms of absolute poverty at the fringes and extreme (display) of wealth" indicate - a bigger gap in wealth.
What you then go on to argue about (structural inequality and near inescapable dependency of the poor in relationships that can be described as wage-slavery Germany) is actually called wealth inequity.
But on this USA has a bigger difference again as well, because things like unaffordable healthcare, education, and transportation all affect ones ability to move in the financial ladder as well.
Imagine the scenario you're describing in that sentence, but now add that getting sick will cost you a lot, you can't afford university, you MUST buy a vehicle for work, and there's an increased likelihood of natural disasters ruining your things. That's the USA.
I don't think we actually disagree by a lot, but it is a matter of weighting I guess (and you seem a bit out of date regarding rental prices and number of homeless in Germany, both of which has increased a lot in recent years).
The main difference I see is that Germany has a lot of structural and generation spanning poverty. It might not be as bad in absolute terms when looking at people individually or looking only at the extreme fringes, but it is there and a bigger problem than in the US. So its like the risk of poverty is higher in the US, but it is actually more likely to be born into and permanently stuck in poverty in Germany.
I definitely do think that I'm a bit out of date on housing with Germany, especially homelessness.
But I just can't comprehend how you think that the structural and generation spanning poverty of Germany is worse than the USA. The healthcare and higher education issue in USA alone assures stronger generational poverty than Germany, because if you're already poor then any health issues will guarantee you stay poor, unlike Germany, and if you are young and poor then you're limited in higher education, also causing you to stay poorer, unlike Germany.
I'd like to understand where you are coming from, but you keep saying that inequity is worse in Germany, but do not provide data or logical reasoning on how. Like, what is unique in Germany that would cause more overall poverty, according to you, than the USA?
Again, I know Germany is definitely not doing well the last couple of years, especially compared to other EU countries. But I do find it really, really hard to believe it's doing worse, if only because the social care system is stronger there than in the USA. Is it solely housing? Is it immigration that's affecting the statistics?
Gratis higher education access is not a good indicator for social mobility, especially in Germany where that access is largely in theory only and has been gatekept already at elementary school level for a long time. I don't like to say so, as it is a common talking point by the right-wing, but the data is quite clear that in Germany at least gratis higher education is mostly just benefiting the already relatively well off and in effect is a net wealth transfer from poorer to richer households.
I am not saying that inequality is worse in Germany than in the US. It is about the same, but with different characteristics. And a lot of the social security net in Germany (as well intended as it might be) actually cements people's position in poverty, just slightly less bad poverty than you would see in countries without such a social security system. For example the health insurance payments are mandatory in Germany... and while they are still affordable by many people with stable jobs, for many people with precarious jobs or other issues they basically force them into the lowest rank social security system and to sell off all the assets they might own before that. So you end up with people that no matter what they try can't exit this poverty trap and the road to hell is paved with good intentions.