New Report Reveals the Depth of German Poverty

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German Chancellor Angela Merkel delivers a speech in Berlin in front of the Federal Association of German Banks on March 23, 2009

To many on the outside, Germany looks like a big, rich country enjoying the benefits of being Europe's largest economy. Inside, Germans know that looks can be deceiving. As in any nation, parts of Germany suffer from poverty, and Germans have always assumed they knew which parts: the west is rich and the east is poor. But a new report reveals the truth isn't that simple. The wealth imbalance in Germany isn't just between east and west; there are also large regional differences between the country's north and south. And across the country there are pockets of poverty more crushing than most Germans realized — and it's only getting worse.

Based on data taken before the recession hit, the new "poverty atlas" published by Paritätische Gesamtverband, an umbrella group for German charitable associations, and the Federal Statistics Office on May 18 is, according to the its authors, the first report to detail Germany's poverty levels and break the results down by region. It shows that in eastern Germany, for example, the average poverty rate is around 20%, with up to 27% of people in one area, Vorpommern, living below the poverty line. By contrast, in southern Germany, in the states of Hesse, Baden-Württemberg and Bavaria, the poverty rate is around 11%. (See pictures of printing money in Germany.)

Chancellor Angela Merkel's home state, Mecklenburg-Vorpommern, is the poorest region in Germany with a 24% poverty rate; one of the richest is the picture-postcard pretty Black Forest region, with a poverty rate of only 7.4%. According to the report, the massive gulf between rich and poor doesn't only exist between regions, but within them, too. The northern areas of the state of Bavaria have a poverty rate of 15%, more than double the 7% rate in Munich, in southern Bavaria. (Read about Merkel in the TIME 100.)

The report also shows that the west and the north, regions commonly believed to be prosperous, actually hold some pockets of poverty. In places such as the city of Hamburg and the states of Lower Saxony, North Rhine Westphalia and Rhineland Palatinate, around 15% of people are living on a low income.

The authors of the report conclude that Germany is a deeply divided country in terms of income and wealth. "Poverty is on the rise," Ulrich Schneider, the head of Paritätische Gesamtverband, tells TIME. "Our poverty rates date from 2007, before the current economic crisis. Unemployment will rise this year so there's bound to be more poverty." In many towns in eastern Germany local factories have shut down and, since reunification, unemployment rates have climbed to 25% after an exodus of young people looking for work in the west — a far cry from those "blossoming landscapes" former Chancellor Helmut Kohl promised back in 1990. (Read "Kohl Wins His Way.")

Anyone who's living off less than 60% of the median household income is defined by the E.U. and the German government as living in poverty. In Germany, that's around $1,066 per month for a single person or $2,240 for a couple with one child. Some of the hardest hit by Germany's increasing poverty levels are children. It's estimated that there are more than 3 million German children living in poverty; in Berlin alone, up to 36% of all children are poor. "The gap between the rich and poor is wider than ever and more children have been plunged into poverty," says Bernd Siggelkow, a pastor who runs the Arche project in Berlin to help children in need. "People who claim state benefits are stigmatized by society and in the past children were simply forgotten by politicians."

Not surprisingly, the poverty atlas has reawakened the long-raging political debate over a national minimum wage. Germany doesn't have a general legal minimum wage and only six sectors of the economy have a statutory rate — in the construction industry, for example, the minimum pay rate is between $12.50 and $18 an hour. Union leaders and politicians have been calling for a national minimum wage of $10.50 an hour, but Chancellor Merkel and her conservative party colleagues have refused to back down, saying a minimum wage could be counterproductive as jobs that pay less than the required minimum would be cut and that could lead to higher unemployment. "More and more people are on low wages earning less than $7 an hour," says Michael Pausder, spokesman for the VDK, an association that promotes equality for people in need. (See pictures of the former East Germany making light of its past.)

The authors of the new report say targeted measures are needed to tackle poverty and unemployment in the poorest regions, but they admit there's no magic bullet. As the recession bites ever deeper, and with a general election coming in September, German policymakers will have to wake up to the nation's growing poverty problems — and fast.

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