Families and foreigners are hardest hit by poverty, report says 

Elise Kissling

"This is an impressive crowd, the haves - and the have mores. Some people call you the elite. I call you my base," U.S. President George W. Bush tells a group of supporters in a much cited clip from Michael Moore's latest film, Fahrenheit 911. for many Germans, this snippet illustrates the dark side of unbridled capitalism, a world in which wealth is concentrated among the few.

After Spiegel newsmagazine got its hands on the government's unpublished poverty report early this week, Germans have started to fear that U.S.-style conditions may already be here. The social affairs ministry has refused to comment on the figures because they are "from a draft that hasn't been approved."

According to the report, the poverty rate has risen to 13.5 percent of the population from 12.1 percent in 1998. Families and foreigners are hardest hit by poverty, the report says. The EU calls people poor who earn less than 60 percent of the EU average. This is true of 13.9 percent of all families and 24 percent of foreigners living in Germany.

At the same time, the wealthy succeeded in grabbing a bigger piece of the pie. The 10 percent at the top of the wealth scale control 47 percent of Germany's total assets, up from 45 percent two years ago. Despite the stock market crash, their wealth has increased by 17 percent. At the same time, the bottom 50 percent controls just 4 percent of Germany's overall wealth, down from 4.4 percent in 1998.

The wealth gap in the United States is much wider. Behind the hoopla of the booming 1990s, most Americans actually lost wealth, defined as assets minus debt. Since the 1970s, the top 1 percent of households doubled their share of national wealth. In 1997, the last data available, this tiny group controlled 40 percent of the nation's household wealth. The top 1 percent have more wealth than the entire bottom 95 percent. Financial wealth is even more concentrated, with the top 0.5 percent controlling 42 percent.

The numbers from the unpublished poverty report concur with a study on child poverty in Germany published last month. The report, put together by Kinderhilfswerk Deutschland, concludes that 6.7 percent of German children live in poverty, twice the rate of the entire population. The child poverty rate, which is based on data collected in 2002, is rising at twice the rate of the general poverty level.

"This is a stable trend that began in the early 1990s. What's shocking is how little the increase in child poverty is registered by the population," said Thomas Olk, one of the report's authors. Olk said that child poverty is concentrated mainly on one-parent families, which have a hard time holding down a job because child care is not readily available. "At 10.4 percent, the share of children living from welfare is especially high among the under-three-year-olds. Parents feel left alone with their problems. At the same time, they're giving up a good share of their own wealth to have children," said Olk.

The president of Kinderhilfswerk said that new welfare and unemployment legislation passed earlier in the year would add 1.5 million children to the welfare rolls in 2005. The only antidote, he said, was to immediately open more day-care centers, kindergartens and all-day schools.

Health and Social Affairs Minister Ulla Schmidt disagrees. "With our welfare reforms, people will receive more targeted help starting next year." This includes an extra 29 Euros a month for welfare children.