Has the corona pandemic made us poorer? Data from the federal states on disposable income shows who got through the crisis year 2020 better and who worse – with surprising results.
Germany is in crisis mode. This is the feeling that has been creeping up on most Germans for a long time. The ongoing war, inflation and rising energy prices are doing the rest these days. But even before the war broke out, the corona pandemic was shaking the country. The fear of losing income was great and still is today. Income data from the federal states shows who lost and who won during the 2020 corona pandemic.
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It is striking that at the beginning of the virus wave, municipalities in the eastern German states held up better than those in the west. For example, income increased
– to name just a few.
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Most of the income losses are found in districts in Baden-Württemberg and Bavaria, among others. Hesse, Lower Saxony, Schleswig-Holstein and North Rhine-Westphalia also recorded isolated negative developments in the crisis year 2020 with regard to average income.
The bottom line is that the data shows that in 2020 citizens almost everywhere in the country had more disposable income at their disposal – that was an average of 0.7 percent per capita. All in all, it can be seen that the incomes of Germans were not hit as hard by the corona pandemic as many had feared. The average disposable income per capita in this country was 23,752 euros in the first Corona year. The financial losses feared at the beginning of the pandemic largely did not materialize.
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The reasons for this are, for example, corona aid or other measures by the federal government as well as short-time work. Ultimately, this combination of measures meant that disposable income remained stable and was even able to grow in some cases.
The pandemic has hit people’s incomes harder in those regions where manufacturing industry is more concentrated. This is shown in particular by the decline in income in Baden-Württemberg and Bavaria. The fact that disposable incomes in the country have shifted in this way can be partly explained by “the different regional industry structures,” explains Maximilian Stockhausen, an economist at the German Economic Institute (IW) in Cologne. He told the “Welt”: “The manufacturing sector is more important in western Germany than in the east, where services dominate, and it was more affected in 2020.”
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The trend is recognizable that precisely those regions that were doing particularly well economically before the crisis had to cope with a sharper decline in primary income. Primary income is income earned through gainful employment or self-employment. In contrast to disposable income, they fell by 1.7 percent per inhabitant in Germany in 2020.
“The state’s measures focused on stabilizing collective wages, for example through short-time work benefits and support payments (immediate and bridging aid) to companies, including small businesses,” said the economist, who drew attention to another factor that caused the increased disposable income in the East can explain: the increase in pensions on July 1, 2020. In the west, pensions rose by 3.45 percent, in the east by 4.2 percent. According to Stockhausen, collective bargaining agreements and pension increases extending into 2020 are also likely to be responsible for the relative stability of disposable incomes in both parts of the country.
