Germans (mis-)interpret inequality

In their new “Inequality Barometer”, Konstanz researchers demonstrate: The German population often assesses the level of inequality incorrectly, underestimating wealth inequality in particular. This also has political consequences.
© Agamaszota, Pixabay

“The centre” has become the ideal of political and social geometry in Germany in recent decades. A large part of the population sees themselves as middle class, although the extent of economic inequality in Germany is still considerable and tends to increase – as shown by new survey data of the Konstanz “Inequality Barometer” project. Individual perceptions of the distribution of income and wealth, but also of one's own chances of advancement, deviate considerably from reality – with significant effects on political processes.

With the “Inequality Barometer”, the Cluster of Excellence “The Politics of Inequality“ supports a project to survey and assess, at regular intervals, inequality and related political attitudes. In collaboration with the Berlin think tank “Das Progressive Zentrum”, the results of the first survey wave are now being published.

Professor Marius Busemeyer, speaker of the Cluster of Excellence and co-author of the study, summarizes: 

© Ines Janas

“Inequality remains one of the central challenges of our time. The “Inequality Barometer shows how the German population perceives this problem and what solutions they expect from politics.”

Professor Marius Busemeyer, speaker of the Cluster of Excellence “The Politics of Inequality“

The perception (and misperception) of inequality has direct political consequences: The extent to which people perceive inequality as a problem influences their political preferences and thus ultimately political action.

Professor Wolfgang Schroeder, chair of the advisory board of “Das Progressive Zentrum”, emphasizes how important this research is for the public debate: “For us to be able to live well together in Germany, we need a more intense public debate on social inequality, and we need to develop evidence-based solutions. It is great that this research project provides a scientific foundation for doing so.”

The policy paper with the first results is available on the website of “Das Progressive Zentrum”.

The most important results of the policy paper:

Majority for a more equal society
Overall, people perceive a high level of inequality in Germany, both in income and wealth as well as in other areas. These perceptions, however, often are distorted. A majority of the population think they are closer to the middle in terms of relative income than they actually are. This implies that those who are lower on the ladder tend to overestimate their relative income position and those on the top tend to underestimate their relative placement. Consequently, the overall extent of income inequality is underestimated. At the same time, the majority of respondents see the overall distribution of resources such as income and wealth as very unequal; around 77 percent would prefer a more egalitarian society.

Income inequality is underestimated
72 percent of the respondents consider the income difference between the ten percent of Germans with the highest income and the ten percent with the lowest income to be “very large”. The differences in wealth in the same segments is considered “very large” by 65 percent of respondents. But: wealth inequality is about three times larger in Germany than income inequality. Nevertheless, people perceive the differences in income more sharply.

Pessimistic view of moving up
Around half of respondents do not believe in advancement prospects. Compared to the situation of their parents, a third already have experienced downward mobility. The remaining 20 percent see themselves at the same level of income and wealth their parents were at their age. Overall, respondents are rather pessimistic regarding the possibility of social upward mobility for those from the lower income classes: Nearly 38 percent assume that children from the lowest income group will remain in this group.

Policy implications
The misperception of inequality has concrete political implications. If people tend to underestimate the extent of inequality, this will lead to lower support for redistribution policies, such as wealth or inheritance taxes, but also higher income taxes. The pessimistic assessment of having advancement chances might fuel disenchantment with politics and increase the support of right-wing populist parties. The researchers have included several suggestions in their policy paper on how politicians can react to the findings. In particular, they suggest more public discussion based on more information about the actual extent of inequality in different dimensions. People should be enabled to relate abstract ideas of inequality more to their specific life situations. This is why more public spaces are needed in which people from different backgrounds can interact.

Paul Töbelmann

By Paul Töbelmann - 02.06.2021