This year the purchasing power of German households weakened again in the second quarter, as confirmed by the Federal Statistical Office (Destatis). Real wages fell by 4.4 percent between April and June 2022, even though they were 2.9 percent higher than the same period last year. With inflation hovering around 8 percent, extraordinary payments have been rolled back, the minimum wage increased, and public aid expanded for the country’s most vulnerable groups. The result is a growing risk of poverty in one of the OECD’s most unequal nations.
Destatis data also show that food prices surged in July, with price increases exceeding 14 percent for certain items. Filling the shopping cart and maintaining a healthy diet have become increasingly expensive, especially for households with elderly members, those with low incomes, the unemployed, single parents, extended families, and retirees. Even before the invasion of Ukraine and the subsequent energy-price spike, these households faced difficulties, and the current inflation compounds those challenges.
According to the annual report from the NGO Paritätischer Gesamtverband, nearly 14 million people in Germany live in poverty, representing 16.6 percent of the population. This is the highest poverty rate recorded since the organization began publishing the report. The current price increase adds to the economic strain left by the pandemic.
Poverty is not a new trend in Germany. The organization notes a steady rise since 2006, with more than two million people slipping into poverty over the last 15 years. Ongoing inflation, the sharpest in three years, worsens this pattern.
Even as Germany functions as Europe’s economic engine, high employment records coexist with poverty growth. Some workers remain underpaid, a situation described as working poverty, while long-term unemployed individuals are counted as unemployed by official statistics.
Personal testimonies collected for the Paritätischer Gesamtverband poverty report illustrate the distress. People describe going a year and a half without a refrigerator because funds to replace it were unavailable, spending much more on food than planned, and retirees on fixed incomes whose pensions do not cover all necessities. The quotes are anonymized, with only initials provided, reflecting the stigma surrounding poverty in Germany.
A typical scene appears on the streets of Berlin and other major cities: seniors collect plastic and glass bottles to earn a few extra euros to supplement pensions. Sometimes they search for bottles late at night to avoid drawing attention. When inflation climbs alongside colder months and higher gas use, commentators warn of rising social unrest and protests.
Germany’s governing coalition—a three-party partnership of the Social Democrats (SPD), the Greens, and the Free Democrats (FDP)—has already introduced a mix of tax reliefs and direct support. Highlights include indirect tax relief to ease living costs and a one-off energy payment between 270 and 500 euros for single-person households and families.
Critics argue that these measures do not go far enough. Inflation remains a prominent burden for middle- and high-income earners, while the most vulnerable low-income households see limited relief from the package. The coalition’s internal disagreements have been widely reported, underscoring the political tensions around addressing poverty and rising prices.