Differences in income are now much greater than twenty years ago. This is evident from the Gini coefficient, a statistical measure of inequality.

Private wealth in Germany is very unequally distributed. What is known as the Gini coefficient for wealth was 0.76 in 2014. In the Eurozone only Lithuania has a higher figure (ECB 2017). The closer the coefficient is to 1, the greater the unequal distribution and the greater the concentration of wealth among few rich people.

The richest ten per cent of households in Germany own nearly 60 per cent of the total household wealth. This figure is well over the OECD average of 50 per cent.

How inequality impacts on economic development is disputed among researchers. Studies carried out at the time of the financial crisis frequently found no clear connection. However, very recently academics have more often supported the position that increasing income inequality has a negative influence.

Are estimates of the extent of inequality in Germany wrong? A recent study by Niehues (2016) concludes that perceived inequality correlates only negligibly with actual income inequality.

The Gini coefficient of need weighted household incomes is generally used as a measure of income inequality. The empirical basis for this in Germany is the Socioeconomic Panel (SOEP) data.

Since the early 1990s the proportion of poor people in the total population has risen, particularly sharply in the first half of the 2000s. According to data from the German Federal Statistical Office, the poverty rate rose to 15.7 per cent in 2016 – making it the highest since reunification.

Generally speaking the trend recently observed is of a renewed increase in inequality of income and wealth. For instance, since the financial and economic crisis the significance of wealth incomes has risen.

Politicians and social partners could do something effective on many different levels.