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How the Rich Become Richer and the Poor Poorer

by Otto Meyer Tuesday, Jan. 30, 2007 at 4:59 AM

The rich become richer by taking more from the poorer and the poor.. How long will humanity fall to capitalism and the asocial drives of a small clique of beneficiaries?.. We can't afford the rich.


By Otto Meyer

[This article published in: Ossietzky 25/2006 is translated abridged from the German on the World Wide Web,]

The average net income in Germany of all private households fell two percent between 1991 and 2005, the German statistical office announced at the end of November. Households today have 30 percent more income but prices have risen 32 percent… The propertied more than doubled their financial assets in the last 14 years, from 2 trillion Euros in 1991 to 4.2 trillion Euros in 2005. However these connections were hardly mentioned in the latest publication of the German statistical office…

The German statistical office identified five different groups in income development: the self-employed, officials, white-collar workers, laborers and the unemployed. Media reporting often covered up the real income decline. The income differences and their differing developments were leveled off or left out. “Purchasing power of consumers has stagnated since 1991,” Die Welt lamented. FAZ (Frankfurter Allgemeiner Zeitung) declared: “Inflation eats up the increased income,” Taz: “Less money in the budget treasury,” SZ: “Germans can afford less.” Half informed, the fast reader should learn that he doesn’t need to get excited. Something terrible is happening to all Germans today. Shared suffering is half suffering!

In most newspapers, we are told that “all of us in our country” have lived too long beyond “our means.” Now “globalization” or the “demographic change” catches up to us. Every one must tighten his belt.

Still everyone is not affected in the same way. The German statistical office made a list. The difference between “laborers” and “self-employed” is the most striking. The households of self-employed persons increased their net annual incomes 38 percent on the average from 77,000 Euros in 1991 to 106,900 Euros in 2005. Including the higher prices, a real income growth of six percent occurred. In contrast, a laborer household had an average 24,100 Euros in 1991 and 30,200 Euros by 2005, a nominal increase of 25 percent and a decline of seven percent when adjusted for inflation. Thus self-employed persons had an income level three times as high as in the past. In contrast, the real wages of laborers fell.

The households of the “unemployed” are the poorest. Their annual income in 2005 was 21,200 Euros with two adults, barely above the European Union poverty line (60 percent of the average household income of the whole population of the respective land, 20,220 Euros in 2005). Many persons dependent on transfer income experience the social exclusion much more dramatically than these average numbers suggest. The German statistical office also includes all pensioners and receivers of unemployment benefits and income support in the group of the “unemployed.” If one considers only those who must live according to the criteria of income support or unemployment benefits 2, their household income is less than 38 percent of the average household income, far below the EU poverty line of 60 percent. Their so-called income is under the 40-percent level described as the “strict poverty line” in the social sciences. Whoever claims the Hartz IV regulations as the “socio-cultural subsistence level” to safeguard the inviolable “dignity of the person” according to Article 1 of the German constitution – as a German judge in Kassel recently declared – legitimates capitalist class rule. This has nothing to do with independent jurisprudence in the interest of the public welfare.

Thus the poor of Germany are poorer and more numerous. Those who imagine they are in the middle because they are still working have become poorer. The rich become ever richer. This discovery is in no way new although an authority like the German statistical office does not mention this every day. The numbers become more interesting when connected with others. The group of self-employed (combining large and small entrepreneurs) was richer while the average of all households must manage with less than 14 years ago. The small group of high-earners could be better off not despite but on account of the lower income of the large majority. The rich were richer by taking from the poorer and the poor.

This is not new but is the general law of the capitalist market economy. For decades, this was made invisible in that the ever-richer owners of capital allow their employees, pensioners and unemployed in the so-called first world to share a little in their profits. These times are over. Social impoverishment no longer only affects populations in the third world. The pressure to constantly greater capital accumulation demands ever-higher profits from the industrial countries. The increase of wealth in the hands of the rich requires stronger exploitation of their workers worldwide and further expropriation of the poor. Compliant or obsequious governments push this so far as they are not hindered democratically.

How long will humanity fall to capitalism and the asocial drives of a relatively small clique of beneficiaries? I recall the slogan of an initiative of leftist Christians in Canada: “We can’t afford the rich.”

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