Eurodiaconia member, Diakonie Deutschland, published a report in partnership with DIW Berlin’s consulting subsidiary, DIW Econ, about the effects inflation and the rising cost of living have on the most vulnerable households. Notably, the report finds that low-income households suffer disproportionately from rapid inflation while policy measures imposed by the Federal Government have been insufficient in relieving this burden.
According to DIW Econ, the lowest-income 20 percent of households spend almost two-thirds (62.1 percent) of their income on necessities such as food, housing and household energy. In contrast, the highest-income 20 percent spends 41.1 percent of their income on such needs. The President of Diakonie Deutschland, Ulrich Lilie, asserted that “without targeted and effective support for the poorest in our society, many people will be faced with the bitter choice of either eating less or freezing by autumn at the latest”.
The calculations show that the federal government’s relief packages are having an effect but are not offsetting the existence-threatening burden on the lowest-income households. Alternately, Diakonie Deutschland calls for a crisis mechanism to mitigate social emergencies and relieve the poorest households. They propose that in the event of a social emergency of national significance, the German Bundestag should declare a national emergency triggering financial support in the form of at least 100 euros per month for six months. The support would be allocated to those receiving housing benefits, child supplements, social benefits in old age or those unable to work.
The President of the German Institute for Economic Research (DIW Berlin) also called for a data infrastructure at the federal level to reveal hidden poverty as well as structural change that offers more permanent solutions such as higher wages and social benefits to alleviate the burden placed upon the most vulnerable households.
To read the report in full (only available in German) click here.