How tomorrows news could also read

Inequalities have been drastically reduced!

Inequality of income and wealth in Germany could be greatly reduced by a number of measures. As long as no changes are enacted these remain dreams for the future, says Senior Expert Ellen Ehmke.  


Ellen Ehmke
Adobe /Shepard
November 03, 2022

In Germany, inequality of income and wealth is causing ever greater social tension. This year, corporations worldwide paid out historically high dividends. The fortunes of millionaires and billionaires grew faster than ever before. At the same time, many less well-off people can no longer pay their bills or their child's school trip due to rising prices, especially for energy and food.  People with low incomes in particular are being hit hard by inflation and the loss of purchasing power.

It is not only the current unequal distribution that is problematic, but also the fact that there is an increasing lack of opportunity for development, economic advancement, and social participation. Both poverty and wealth have become entrenched. That's why it will take a new approach to ensure that those who are poor don't remain poor. This can't be changed overnight, but in the longterm policy measures can ensure that things are fairer again in Germany. For this reason, I would like to take you, my readers, on a short journey through time to Germany in the year 2025. 

The autumn morning is dreary, but I detect a few rays of hope in the day's headlines. For example, it is reported – in a future yet to happen, mind you – what people will be able to do with their "inheritance for all." Just to explain: such an inheritance for all is intended to be a kind of one-off start-up capital that is available to every citizen – regardless of their parents’ fortunes. It is not tied to conditions and should, at best, be a booster for one's life. This kind of support could narrow the gap between rich and poor considerably.

Crisis upon crisis in the fall of 2022

In the fall of 2022, the inequalities in our society, after climbing for a decade, reached an all-time high. And not only in Germany. In Italy, demonstrators burned gas bills in the streets; in the UK, tenants refused to pay their energy bills. People were furious. They resisted calls to tighten their belts when there was no longer enough money for food or heating.  

At the same time, another crisis is manifesting itself more clearly than ever before, and yet continues to be ignored by many: the climate crisis. In the summer of 2022, Europe's largest rivers dried up, and half the land area of Pakistan was flooded, costing the lives of more than 1,600 people. In Somalia alone, three and a half million people suffered hunger in the worst drought in more than 40 years.  

But back to Germany. Here, too, in the fall of 2022, there were protests against the dramatically higher cost of living. People demanded that the government tackle growing inequality and the climate crisis in equal purpose, instead of playing them off against one another. In winter 2022, the German government adopted measures that went far beyond the coalition agreement of the previous year. Finally, those who had benefited from the crisis and the wealthy had to make a much larger financial contribution to the extensive investments in the social and environmental public infrastructure. Survey results underscored that a broad consensus supported these measures: They proved again that an overwhelming majority wants a fairer distribution of income and wealth, as well as decisive action in the face of environmental crises. 

“Looking ahead definitely demonstrates that there are many ideas on how to sustainably diminish inequalities.”

Quote fromDr. Ellen Ehmke, Senior Expert Inequality, Global Issues

A bundle of reforms to reduce inequalities 

Central to this bundle of measures were reforms of the inheritance and wealth taxes. Their revenues made possible the inheritance for all, which all adults receive regardless of their parents' bank accounts. Wealth inequality was reined in by being reduced at the top to allow for the accumulation of new wealth across the board.

In addition, reductions in income inequality transpired through a more even distribution of work hours across the entire working population. The massive expansion and upgrading of health, nursing, care, and education services also led to higher wages and more employees in these sectors. This system-relevant labor finally received more than just a lip-service “bravo”. This not only benefited the many women in these professions, but also those who previously could not be (fully) employed because of unpaid care work – and, of course, the children, elderly, and sick people who could now enjoy better services.

These investments will surely also be reflected in an improvement in the new indicators of the well-being of people and nature, which the German government has been using as a yardstick since 2024. Following the example of New Zealand, it abandoned focusing solely on economic growth in order to evaluate the condition of society.

Oh yes, my favorite headline in 2025 reads "Employees have taken over a medium-sized manufacturer of heat pumps." In the interview, the managing director explains that she and her colleagues'  inheritance for all constituted the cornerstone of the capital required to acquire the company. Thanks to this  inheritance for all, employees not only have the knowledge, but also the capital to continue the business as a worker-owned enterprise – such a broad distribution of business assets across society further reduces wealth inequality.

What good news! Unfortunately, it is only one of many possible futures. But looking ahead definitely demonstrates that there are many ideas on how to sustainably diminish inequalities. After jumping back from 2025 to today, I believe that three years may not be enough time to implement all of these measures. That's why it's all the more important that we set out now for a better future in which a good life is possible for everyone.

Read the article on Focus Online (in German)

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