Poverty researchers on the consequences of Corona: cardinal problem of wealth distribution

Corona works like a burning glass, says poverty researcher Christoph Butterwegge. The real virus of inequality is neoliberalism.

A corona test station on the A8 from Munich to Stuttgart Photo: Daniel Biskup / laif

taz: Mr. Butterwegge, the second corona wave is sweeping across the Federal Republic. What social impact will that have?

Christoph Butterwegge: That of course depends on how hard it hits us. Much will depend on whether social life has to be shut down again. In any case, experience with the first wave shows that socio-economic inequality will continue to grow.

What are you up to?

That inequality worsened during the lockdown and economic slump is evident on three levels. First of all, there is the health level with the infection itself: Before the virus, all people are ostensibly the same, but there is a causal connection between income and immune deficiency. The poor are exposed to a higher risk of infection because their working conditions are generally poorer and their living conditions are more hygienic. In addition, they often suffer from social pre-existing illnesses, which increases the risk of getting seriously ill with Covid-19. In addition, there is the psychological stress: Those who have a large apartment survive a quarantine much more relaxed than a family whose members do not have their own rooms.

born 1951, has been researching economic, social and political inequality in Germany for decades. The political scientist taught as a professor at the University of Cologne until 2016. A member of the SPD from 1970 to 1975 and from 1987 to 2005, he ran for the office of Federal President in 2017 as a non-party member at the suggestion of the Left Party. His latest book “Inequality in Class Society” has just been published by PapyRossa Verlag.

And the second level?

That is the economic one. Radical infection control measures are necessary, but leave behind economic collateral damage that does not affect all strata of the population equally. Rather, the corona crisis has made some people richer and many poorer. There is a social polarization between those who suffer severe financial losses due to lost earnings, business termination, short-time working or job loss, and those who have a company or a job that the recession cannot harm. Some industries such as online trading, logistics companies and delivery services even increased their profits during the crisis.

The lockdown phase in the spring made it clear that a large proportion of the people living in Germany are barely able to make ends meet financially if their regular income is lost for a few weeks. Right down to the middle class, there is simply a lack of reserves. Ultimately, it is not your income that counts, but your wealth. It is particularly unevenly distributed in this country and is concentrated in 45 hyper-rich families who own more than the poorer half of the population – over 40 million people. Around a third of the population has no wealth worth mentioning and is therefore only one resignation, a serious illness or a new lockdown away from poverty.

But haven’t the federal and state governments cushioned a lot with their multi-billion dollar aid programs?

This brings us to the third level. I am far from condemning the state aid packages, rescue packages and subsidy measures in their entirety. Much of it was needed. But their distribution policy imbalance is striking and worthy of criticism. There is a clear overweight in favor of the large companies, which are supported even when that is unnecessary.

Can you give us a specific example?

Take BMW as an example. I am a supporter of short-time work benefits because it can prevent mass layoffs. But I think it’s a scandal when the Federal Employment Agency takes over a large part of BMW’s wage costs by paying short-time work benefits, even though there was enough money to pay shareholders a whopping dividend of 1.64 billion euros. The richest siblings in our country, Susanne Klatten and Stefan Quandt, took in more than 750 million euros.

Denmark and France make bridging aid subject to the condition that a company does not distribute profits. I would like that for Germany too. On the other hand, those most in need were given far too little attention by the relief efforts. The willingness of the state to help varies depending on the social status.

However, Parliament has also passed two “social protection packages”.

North Rhine-Westphalia, Wuppertal: People stand in a long queue in front of the entrance to a new Corona Walk-In test center in a parking lot.

Queue instead of Porsche in the drive-in: Corona test station in Wuppertal Photo: Caroline Seidel / dpa

They were also urgently needed. People who, for example, fell into Hartz IV as self-employed persons and small businesses were considered. The job centers grant you limited access until the end of the year without having to examine your assets, the size of the apartment or the rent. But that does not go far enough. A less bureaucratic approach should apply to every applicant, and in the long run. I consider it extremely problematic that the groups of people hardest hit by the pandemic have only been given marginal consideration. Homeless and homeless, refugees, migrants without a secure residence status, people with disabilities, people in need of care, addicts, prostitutes, unemployed, low-income women, low-income pensioners and transfer benefit recipients are hardly among the winning groups.

In your opinion, how exactly should they have been helped?

Let’s just take single parents and families in the Hartz IV relationship: They had the biggest problems because schools and daycare centers were closed and the free lunch that poor children there now get was no longer available. The state could and should have helped immediately and quickly. Why wasn’t they granted a premium of 100 euros per month for food, protective masks and disinfectants in the spring?

In the meantime there has been a child bonus of 300 euros per child, which is not counted towards unemployment benefit II or social benefit.

That helped those affected, no question about it. However, the one-off payment by the federal government in two autumn installments comes very late. In addition, of course, it does not replace permanent support. It seems to me more like a trade in indulgences with which the government frees itself from the actual obligation to provide continuous aid. It is also questionable that the parents from the middle and upper classes also receive the child bonus and only have to pay it back with the tax return.

But don’t you have to acknowledge that Germany has come through the crisis quite well so far?

Compared to other countries where there are many more Covid-19 deaths to complain about, the Federal Republic has so far got through the pandemic relatively well. But this does not change the fact that the already considerable inequality in Germany continued to grow during the exceptional pandemic situation and the gap between rich and poor widened even more.

Is Corona an inequality virus for you?

No, the real inequality virus is neoliberalism. Corona only acts as a catalyst. In the pandemic, inequality has worsened due to capitalist ownership and policies that idolize the “business location”, serve the interests of financial investors and therefore have a socially polarizing rather than equalizing effect. The cardinal problem of our society is the existing distributional imbalance.

Can you be more specific?

According to the criteria of the European Union, 13.3 million people in Germany are poor or at least at risk of poverty today – a record figure. You have less than 60 percent of the median income available – that’s 1,074 euros a month for a single person. At the same time, according to a recent study by the German Institute for Economic Research, 67 percent of total net assets are now in the top tenth, 35 percent are concentrated in the richest percent of the population and the richest per mille still comes to 20 percent.

This means that even among the rich themselves, most of the wealth accumulates in the hyper-rich. The richest man in Germany, Dieter Schwarz, owner of Lidl and Kaufland, already owned 41.5 billion euros in private assets before the pandemic. That has now increased by another 300 million euros.

As a consequence not only of the current corona crisis, you demand in your new book that “the capitalist economic and social system” must be fundamentally changed ”. That sounds quite a long way from social reality.

You don’t have to be a Marxist to realize that Germany is a class society with growing socio-economic inequality, the main reason being the persistent conflict of interests between capital and labor. If you want to fight poverty effectively, you have to touch private wealth. The pandemic state of emergency has shown many people the value of solidarity again. They notice that the fixation on the market and the competition is of little use in such a situation. This also includes the realization that further economization, financialization and privatization, especially of the health care system, would be a mistake.

Skepticism about the promises of neoliberalism is the basic requirement for critical social awareness. This is just as positive as the knowledge which professional activities are “systemically relevant” – but are not paid accordingly well. Whether it is about a decent collectively agreed wage, an increase in the minimum wage to at least 12 euros, the introduction of solidarity-based citizens’ insurance or a correction of course in tax policy – there is still a lot to be done if the gap between rich and poor does not widen further should.

You are considered the best-known poverty researcher in Germany. You have been analyzing the existing misery for decades. Didn’t that make you a deeply frustrated person?

No, not at all. Because I am concerned with poverty, its causes and manifestations, but also with enormous wealth. The critical analysis of social developments can be discouraging. Nevertheless, my will is unbroken to change the existing conditions in the direction of more social justice. I will not let myself be dissuaded from this by some setbacks and right-wing tendencies.