To summarize: from 1950 to 1970, the average household income increased more than fourfold. The most common income level was always far below the average – with this being mostly attributable to the large number of retiree-households. Half of all households had [only] about one quarter of the total available [national] income at their disposal – a situation that remained virtually unchanged over time; the disparity in income distribution did not change during this time period. Within individual income groups, incomes tended to level out, but the average income of self-employed households rose much more than that of other groups. One’s standard of living is determined not only by earned income and investment earnings; it is also supplemented by social welfare payments. Pension, health, accident, disability, and unemployment insurance claims provide income even to people who have dropped out of the labor force temporarily or permanently. Pension amounts have a particularly strong impact on the living conditions of the population and on consumption levels. The linking of pensions to the inflation rate prevents them from perpetually lagging behind changing wage and income levels, and it insures a more stable standard of living for the elderly. Growing segments of the population have become integrated into the social welfare system, and this has guaranteed an independent livelihood, even in illness and old age, to those entitled to pensions. Nonetheless, housewives, who are not entitled to pensions based on their own gainful employment, remain dependent on their husbands’ pensions. Thus, they depend on the family unit to secure their livelihood. Parents no longer depend on their children to provide for them in old age; sometimes they can even support the establishment of their children’s households by sharing some of their income. But since their pension payments are based on their pre-retirement income, this social welfare payment does not lead to any significant changes in the income disparity between social groups.
Finally, living conditions are increasingly determined by public services. The government should use public funds to guarantee the availability of educational opportunities, healthcare, and leisure-time activities, as well as the maintenance of [proper] traffic and environmental conditions. One’s ability to utilize these services and benefits is independent of income level, and these offerings cannot be achieved through private expenditures. A wide-ranging discussion on precisely this topic has recently gotten underway. It can be characterized by the following keywords: public poverty and private wealth, stimulating need by making social services and programs (especially in the fields of education and health) available to the public, raising the quality of life, and structural differentiation of living conditions as the result of horizontal supply disparities. [ . . . ]
Source: M. Rainer Lepsius, “Sozialstruktur und soziale Schichtung in der Bundesrepublik Deutschland” [“Social Structure and Social Stratification in the Federal Republic of Germany”]; reprinted in Richard Löwenthal and Hans-Peter Schwarz, eds., Die zweite Republic. 25 Jahre Bundesrepublik Deutschland – eine Bilanz [The Second Republic. 25 Years of the Federal Republic of Germany – A Balance Sheet]. Stuttgart, 1974, pp. 272-75.
Translation: Allison Brown