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Who is rich in Germany?

Business2018-12-06

The question is tricky in Europe's biggest economy, the fourth largest in the world, where even rich people do not define themselves as wealthy.The country performs well in many measures of well-being relative to most other countries in the Better Life Index, according to the OECD.It's not a surprise that Germany, a country with a population of 82 million that has no wealth tax, is considered wealthy.But inequality appears to be an issue that co-leader of the Left Party Sahra Wagenknecht has taken a tough stance on, saying the wealthiest 1,000 Germans own more than one trillion euros.The debate on wealthThe famous euro sign landmark is pictured outside the former headquarters of the European Central Bank. /Reuters PhotoFriedrich Merz, the millionaire politicianbidding to replace Angela Merkel as the head of the Christian Democrats (CDU), sparked a debate last month after claiming to be middle class.Many critics see Merz's claim as normal in a country as much of Germany's population identifies as middle class."In Germany, the population has a large affinity to the middle class,” Markus Grabka, an economist with the German Institute for Economic Research, was quoted as saying by the Handelsblatt Today newspaper.The newspaper said surveys show that many in the country only tend to think of people richer than they are as “rich.”This means that, like Merz, they never think of themselves as wealthy, it said, referring to the federal government's suggestion that "three times the median income” is rich; meaning an after-tax monthly earning of around 9,500 euros (10,767 U.S. dollars) qualifies.The monthly earnings of the upper middle class after tax is around 5,700 euros (6,460 U.S. dollars), a figure which applies to the top 20 percent of households in Germany, said Grabka.The paper quoted researchers as saying that income is not necessarily the best indicator of wealth.Consulting company Cap Gemini said assets included in wealth statistics make a difference, adding that properties that a person does not live in but owns freehold are also counted, then anyone with over a million U.S. dollars' worth of property is a “high net worth individual” and anyone worth over 30 million euros (34.2 million U.S. dollars) belongs to the “ultra-high net worth individuals.”According to Cap Gemini, there are 1.36 million millionaires in Germany.Who is Merz?Merz's father was a district judge and his grandfather was a mayor. The 62-year-old made a fortune in the financial sector and owns two private jets.After leaving politics in 2009 after being sidelined by Angela Merkel, he moved into the private sector.He is serving as chair of the US investment firm BlackRock's German arm and is also associated with the US law firm Mayer Brown. He also serves on the board of many companies.Merz is running against Health Minister Jens Spahn, 38, and CDU General Secretary Annegret Kramp-Karrenbauer, 56.Christian Democratic Union (CDU) candidate Friedrich Merz speaks at a  conference in Luebeck, Germany, November 15, 2018. /Reuters Photo'A million euros a year'In a roundtable interview with the readers of Germany's popular Bild tabloid in November, he was forced to disclose for the first time that he makes about one million euros (1.14 million U.S. dollars) a year.He told the Bild am Sonntag newspaper that he began with the income of a law clerk in Saarbruecken, a sum that he says was manageable for a family with two children."Today I earn about a million euros gross,” he added.Reacting on Merz's claim, Prof. Gerhard Bosch, a sociologist, told Germany's Sueddeutsche Zeitung newspaper, "There is no doubt purely on the basis of his earnings that Merz belongs to the higher levels of the upper class."But Thomas Druyen, a wealth expert at Sigmund Freud University, sees Merz as only modestly wealthy by international standards.He said someone like the former mayor of New York, billionaire Michael Bloomberg, would laugh at Merz's income.A report in the newspapers said that Merz did not give details about his income, but according to annual reports he recently earned 125,000 euros (141,681 U.S. dollars) at BlackRock, as well as 80,000 euros (90,676 U.S. dollars) at toilet maker Wepa Industrieholding, 75,000 euros (85,008 U.S. dollars) at Bank HSBC Trinkhaus, and 14,000 euros (U.S. dollars) at the Cologne-Bonn Airport GmbH.His claims triggered a heated debate in Germany and led to a series of memes on social media.A car rental firm that offers luxury vehicles even exploited his claim by posting Merz's picture with this phrase: “For €1,000,000 you can be middle class. But for just €99 a day, you can be upper class.”According to OECD's Better Life Index, the average German household net-adjusted disposable income per capita is 33,652 U.S. dollars per year, higher than the OECD average of 30,563 U.S. dollars a year.The minimum wage this year is 8.84 euros (10.02 U.S. dollars) per hour, which works out around 1,500 euros (1,700 U.S. dollars) per month. The government announced in June this year its plans to raise the minimum wage to 9.19 euros (10.74 U.S. dollars) per hour in 2019 and 9.35 euros (10.60 U.S. dollars) per hour in 2020.(CGTN)

The question is tricky in Europe's biggest economy, the fourth largest in the world, where even rich people do not define themselves as wealthy.

The country performs well in many measures of well-being relative to most other countries in the Better Life Index, according to the OECD.

It's not a surprise that Germany, a country with a population of 82 million that has no wealth tax, is considered wealthy.

But inequality appears to be an issue that co-leader of the Left Party Sahra Wagenknecht has taken a tough stance on, saying the wealthiest 1,000 Germans own more than one trillion euros.

The debate on wealth

The famous euro sign landmark is pictured outside the former headquarters of the European Central Bank. /Reuters Photo

Friedrich Merz, the millionaire politicianbidding to replace Angela Merkel as the head of the Christian Democrats (CDU)

, sparked a debate last month after claiming to be middle class.

Many critics see Merz's claim as normal in a country as much of Germany's population identifies as middle class.

"In Germany, the population has a large affinity to the middle class,” Markus Grabka, an economist with the German Institute for Economic Research, was quoted as saying by the Handelsblatt Today newspaper.

The newspaper said surveys show that many in the country only tend to think of people richer than they are as “rich.”

This means that, like Merz, they never think of themselves as wealthy, it said, referring to the federal government's suggestion that "three times the median income” is rich; meaning an after-tax monthly earning of around 9,500 euros (10,767 U.S. dollars) qualifies.

The monthly earnings of the upper middle class after tax is around 5,700 euros (6,460 U.S. dollars), a figure which applies to the top 20 percent of households in Germany, said Grabka.

The paper quoted researchers as saying that income is not necessarily the best indicator of wealth.

Consulting company Cap Gemini said assets included in wealth statistics make a difference, adding that properties that a person does not live in but owns freehold are also counted, then anyone with over a million U.S. dollars' worth of property is a “high net worth individual” and anyone worth over 30 million euros (34.2 million U.S. dollars) belongs to the “ultra-high net worth individuals.”

According to Cap Gemini, there are 1.36 million millionaires in Germany.

Who is Merz?

Merz's father was a district judge and his grandfather was a mayor. The 62-year-old made a fortune in the financial sector and owns two private jets.

After leaving politics in 2009 after being sidelined by Angela Merkel, he moved into the private sector.

He is serving as chair of the US investment firm BlackRock's German arm and is also associated with the US law firm Mayer Brown. He also serves on the board of many companies.

Merz is running against Health Minister Jens Spahn, 38, and CDU General Secretary Annegret Kramp-Karrenbauer, 56.

Christian Democratic Union (CDU) candidate Friedrich Merz speaks at a  conference in Luebeck, Germany, November 15, 2018. /Reuters Photo

'A million euros a year'

In a roundtable interview with the readers of Germany's popular Bild tabloid in November, he was forced to disclose for the first time that he makes about one million euros (1.14 million U.S. dollars) a year.

He told the Bild am Sonntag newspaper that he began with the income of a law clerk in Saarbruecken, a sum that he says was manageable for a family with two children.

"Today I earn about a million euros gross,” he added.

Reacting on Merz's claim, Prof. Gerhard Bosch, a sociologist, told Germany's Sueddeutsche Zeitung newspaper, "There is no doubt purely on the basis of his earnings that Merz belongs to the higher levels of the upper class."

But Thomas Druyen, a wealth expert at Sigmund Freud University, sees Merz as only modestly wealthy by international standards.

He said someone like the former mayor of New York, billionaire Michael Bloomberg, would laugh at Merz's income.

A report in the newspapers said that Merz did not give details about his income, but according to annual reports he recently earned 125,000 euros (141,681 U.S. dollars) at BlackRock, as well as 80,000 euros (90,676 U.S. dollars) at toilet maker Wepa Industrieholding, 75,000 euros (85,008 U.S. dollars) at Bank HSBC Trinkhaus, and 14,000 euros (U.S. dollars) at the Cologne-Bonn Airport GmbH.

His claims triggered a heated debate in Germany and led to a series of memes on social media.

A car rental firm that offers luxury vehicles even exploited his claim by posting Merz's picture with this phrase: “For €1,000,000 you can be middle class. But for just €99 a day, you can be upper class.”

According to OECD's Better Life Index, the average German household net-adjusted disposable income per capita is 33,652 U.S. dollars per year, higher than the OECD average of 30,563 U.S. dollars a year.

The minimum wage this year is 8.84 euros (10.02 U.S. dollars) per hour, which works out around 1,500 euros (1,700 U.S. dollars) per month. The government announced in June this year its plans to raise the minimum wage to 9.19 euros (10.74 U.S. dollars) per hour in 2019 and 9.35 euros (10.60 U.S. dollars) per hour in 2020.

(CGTN)

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