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Increasing income gap ‘due to poor education’

The gap between rich and poor in Germany is widening dramatically, a new OECD report says, warning that investment in education and training were key to fighting inequality.

Increasing income gap 'due to poor education'
Photo: DPA

The latest report from the Organisation for Economic Co-operation and Development (OECD) showed the top 10 percent of working-age Germans earned about eight times as much as the bottom 10 percent.

The highest-earners had an average annual income of €57,300, while the lowest-earners managed just €7,400, the report said.

During the 1990s, the income gap was just six to one, the report said.

This widening difference between Germany’s wealthiest and its poorest put the current Teutonic income gap alongside that in other OECD countries such as Canada, Belgium and Australia. Germany still has some way to go to reach the wealth gap of the US, where the top 10 percent makes 15 times more than the bottom 10 percent.

A range of factors contribute to the widening income gap, including the share of part-time workers increasing from 11 to 22 percent of the workforce between 1984 and today, the report said.

Societal changes are also driving the trend – there are more single parent households, people living alone and people marrying in similar earnings classes, all of which keep income levels down, the report said.

Increased income levels among women have helped to mitigate the effects of these social changes somewhat, the report said.

Wide income disparities are considered damaging to social cohesion with some studies showing that crime rates can be higher in economically unbalanced societies like the United States.

The OECD said better employment that gives people a chance to escape poverty, improved educational systems and reformed tax and benefits schemes were key to tackling income inequality.

It also argued for the importance of free public services such as education and healthcare.

“There is nothing inevitable about high and growing inequalities,” said OECD Secretary-General Angel Gurría in a statement.

“Our report clearly indicates that up-skilling the workforce is by far the most powerful instrument to counter rising income inequality. The investment in people must begin in early childhood and be followed through into formal education and work.”

The Local/mdm

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WORKING IN GERMANY

Which Bavaria-based companies regularly hire English speakers?

Bavaria is no doubt a beautiful state with a strong economy, but can be a hard place for non-German speakers to integrate. The Local takes a look at job opportunities in Germany’s southeastern 'Free State.'

Which Bavaria-based companies regularly hire English speakers?

Munich ranks third in German cities with the highest total GDP, behind Berlin and Hamburg, but in terms of GDP per capita, it’s higher than both of them.

It also consistently ranks high, often highest, in terms of average household income.

As of 2023, nine of the 40 companies listed on DAX, Germany’s stock index, were based in Bavaria. Seven of those are based specifically in Munich.

While Frankfurt is commonly known to be Germany’s business capital, Munich can claim the title of Germany’s insurance capital, which is saying something, as Germany is home to some of the largest insurance firms in the world, like Allianz.

Beyond the state’s capital city, a number of international companies are based elsewhere in Bavaria, particularly in the Franken region, near Nuremberg.

Which companies actively hire English speakers?

Bavaria, and Munich in particular, is home to a number of companies at the forefront of international business. But the state is known for its traditional, sometimes conservative, culture, which affects its business culture as well.

Whereas companies embracing English as their primary business language are easy to find in Berlin, the practice is less common in the south. That said, there are some notable exceptions. 

Sportswear giants, Adidas and Puma, both have their headquarters near Nuremberg in Herzogenaurach, and regularly recruit English speaking international talent.

“As an international company, our teams reflect the rich diversity of our consumers and communities,” Jon Greenhalgh, Senior Manager Media Relations for Adidas told The Local. “Fostering a culture of inclusion where we value and leverage differences, ensures that we can authentically engage with our employees and truly connect with our consumers.”

He added that around 40 per cent of Adidas’ Germany-based employees are foreign nationals, from over 100 different countries.

Siemens and BMW rank among Bavaria’s top employers, and are also known to hire their fair share of foreigners.

“In Germany, we recently had around 2,000 open positions,” Konstanze Somborn told The Local on behalf of Siemens AG.

He added that Siemens operates in 190 countries. “That is why we value international teams very much…English as a common language is very usual.”

READ ALSO: ‘Which German companies want to hire foreigners?’

Similarly, BMW hires workers from a variety of backgrounds. 

“Every year, we hire lots of internationals and welcome them to the BMW Group,” Dr. Hans-Peter Ketterl, a press spokesman for BMW Group told The Local. 

But not all of these positions are available to non-German speakers.

Ketterl added that BMW’s working language is German in the country, even though, “English is an indispensable entry requirement as the second corporate language in many areas of the company.”

Check job boards and follow best practices

If it’s your first time applying for jobs in Germany, make sure to change your resume to the German format, even for English positions.

While Germany is home to its own job boards, like Xing, LinkedIn is probably the best place to start. In addition to searching for positions based in your preferred location, you can check relevant groups, like Munich Startups, to broaden your horizons.

The English Jobs in Germany website is also a good resource to start with. 

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