Why everyone would like to be middle class – Page 1
Fast jeder Deutsche zählt sich zur Mittelschicht
oder wünscht sich dies zumindest. Aber wie definieren wir die Mittelschicht und
wer zählt dazu? Die Sehnsucht, zur Mitte der Gesellschaft zu gehören, und wie eine
Gesellschaft diese definiert, sagt viel über die Werte einer Gesellschaft
aus, aber auch über individuelle Wahrnehmungen und Fehleinschätzungen.
New studies reveal a surprising discrepancy between people’s perception of belonging to the middle class and the reality. Six out of seven top earners in Germany consider themselves to be part of the middle class. Even CDU leader Friedrich Merz identified himself as middle class in 2018, despite having a nearly seven-figure annual income. However, even individuals with very low incomes predominantly classify themselves as middle class. At the same time, the majority of Germans acknowledge the extent of income inequality in Germany and recognize that it has increased. Therefore, it is not that people underestimate inequality, but rather they consciously or unconsciously place themselves differently in society’s distribution than what corresponds to reality.
Societal groups and the middle class are typically defined based on income and wealth. However, there are also other attributions, such as those presented by Friedrich Merz during the 2018 election campaign. In an interview, he explained that he learned from his parents what constitutes the middle class. Namely: „hard work, discipline, decency, respect, and the understanding that one gives back to society when one can afford it.“ Merz thus offers an alternative to purely monetary categorization. For him, virtues are the foundation for assigning individuals to societal groups or social classes. But what does this then say about all the people who do not belong to the middle class? Are they not decent, hardworking, and disciplined?
The assignment of virtues to the center of society reveals a lot about the values and the definition of achievement and achievers. This extends to the political discussion, especially when it comes to tax cuts. Achievers are considered those who have a high income. But what about the many people who work just as hard as top earners, but earn less in fields such as nursing, healthcare, or childcare? Assigning virtues in this way is exclusionary and therefore unsuitable.
The best definition of the middle class is based on income. It is difficult to include wealth as a factor, as nearly 40 percent of households in Germany have practically no wealth and would therefore be classified as part of the lower class rather than the middle class. A common definition used in academia is to consider all individuals in households with a monthly net income between 75 percent and 170 percent of the median income as part of the middle class. A study by DIW Berlin (PDF) based on this definition shows that the middle class in Germany has decreased from 63 percent in the 1990s to just under 56 percent in 2015. Meanwhile, the upper class has grown from eleven percent to 18 percent during this period. The lower class, with less than 75 percent of the median income, has increased from 25 percent to 32 percent. Although there are no new figures available for the post-coronavirus pandemic period, there are indications that this decline in the middle class has continued.
What are the causes of the shrinking middle class? The main explanation is the increase in precarious forms of employment, including part-time work such as mini-jobs, which employ seven million people. In addition, there has been a growing wage inequality since the 1990s and an unusually heavy burden of taxes and levies on labor, which reduce work incentives. Few countries tax labor as heavily and wealth as lightly as Germany. This also makes it difficult for people with low incomes to increase their own income through work, build wealth, and move into the middle class. 60 percent of all wealth in Germany is inherited – thus, the accumulation of wealth depends more on the luck of birth than on one’s own performance and effort.
Der Wunsch nach Gemeinschaft
Warum betrachten sich so viele Menschen in Deutschland als Teil der Mittelschicht, obwohl nur etwas mehr als die Hälfte tatsächlich dazu gehören kann?
One possible explanation is the misjudgment. People compare themselves to others in their social and professional environment. An employee with an annual income of 100,000 euros objectively belongs to the top five percent of earners, but may not feel like someone from the upper class among friends and acquaintances who earn similarly well. And a worker with an annual income of 30,000 euros may indeed perceive themselves as someone with a moderate income in their environment.
What would you estimate to be the annual income (specifically, the net equivalent income) at which a four-person family in Germany would be considered middle class? In Germany, what is the range of salaries that represent more than 70 percent and less than 200 percent of the median income (a slightly broader definition of middle class than usual)? The answer: Those who earn between 36,700 euros and 97,900 euros in net annual income belong to the middle class.
Some readers may be surprised that someone with an income of 36,700 euros is already considered middle class, and that there are almost 30 percent of households who earn less on an equivalized basis. (To clarify, „equivalized“ means adjusted for household size, as a household with more members has proportionally lower expenses and requires less income to be considered middle class.)
But this is only part of the explanation. Many may be very aware of their high or relatively low income and the association with the middle class may rather reflect the desire for community and not wanting to be an outsider. In addition, both poverty and wealth in our society are often associated with a stigma. „One does not talk about money,“ it is still said. And especially high earners often struggle to openly communicate their salary, as they are concerned about eliciting criticism or envy.
The majority of people desire to be part of the middle class in our society. Even high earners want to be in the middle. This conscious or unconscious misjudgment reflects the values of society and shows how deeply rooted the desire for social participation and community is. However, the sad truth remains that the middle class in Germany is shrinking, and at a faster rate than in most comparable countries. The question of whether someone is part of the middle class or even the upper middle class depends less and less on their work and personal efforts, but increasingly on inheritances and the lottery of birth.
Note: On September 8, 2023, at 9:30 am, in a previous version, the income limits for the middle class were not accurately described. We have corrected the relevant section.