WSI-Distribution Report: Income Inequality Threatens Democracy
- From David Kläffling
- Reading duration 3 min
The recently published WSI Distribution Report 2023 sheds light on various facets of income inequality - including how and why it can pose a threat to democracy.
The everyday experiences and opportunities of people in Germany depend crucially on their income. Absolute and relative poverty not only goes hand in hand with doing without material goods such as new clothes or heating, but also has immaterial consequences for those affected. The recent 'Distribution Report' from the Hans Böckler Foundation's Institute of Economic and Social Sciences (WSI) documents, using survey data from the German Socio-Economic Panel Study (SOEP), that poverty is positively correlated with perceived low social esteem and negatively correlated with high social esteem.
There are clear differences with regard to the experience of esteem or disdain: almost a quarter of the permanently poor state that others often look down on them. In contrast, less than 14 per cent of the temporarily poor, only 8 per cent of people with average incomes and barely more than 3 per cent of the rich report frequent rejection. The rich also differ greatly from the rest of society in their perception of esteem: almost 48 per cent state that others often look up to them, compared to only 28 per cent of the permanently poor (33 per cent and 35 per cent of the other two groups).
WSI-Verteilungsbericht 2023
The report also shows that these individual perceptions are becoming a social problem, as they contribute to the alienation of individual groups from the democratic system. When people no longer feel valued by society and lose trust in the political system, democracy also suffers.
The report shows that trust in democratic institutions is heavily dependent on income levels. While there are only a few people among the rich who do not trust the police or the legal system, over 22 per cent of the permanently poor do not trust the police and a good third do not trust the legal system. Trust in politics is also strongly positively correlated with income.
Of course, other factors such as educational qualifications presumably also play an important role. It is therefore important to emphasise that the results do not represent causal effects and therefore no direct policy recommendations can be derived. However, as the authors themselves write, the report can help to illustrate how much the realities of life differ between different income groups. And how a high level of inequality can jeopardise democracy.
The full report is available here.