... those earning between 70 per cent and 150 per cent of the average income - the standard definition of the middle-class ...
By this definition and the above reasoning, 90% of the German workforce earning €250,000 a year would lower the German middle class to a vanishingly small percentage of the total population thus destroying the German economy.
However, the study which is cited is actually already known on ET for longer. Dodo has shown a picture which showed the eroding middle class (and the study is about 10m new people which fall out of the definition). Nobody can really deny that there is happening such a development, especially not the German left. The question is, what would halt or soften it. The DIW thinks, that lower wages and lower taxes for rich people and some other measures will do it. As there has been real wage increases in some branches recently the DIW fears Germany is losing its capability to compete. Others deny that, because inside the Eurozone Germany is highly competitive, and outside the Eurozone exchange rate is much more important than some percent wage increase or decrease. In the "Zeit"-Blog Herdentrieb, one of the bloggers was betting, that the trade unions of Italy and France would come to Germany this year and striking for higher wages in Germany, because the wage moderation in Germany is partially reason for the strong Euro, which kills their businesses.
z = +/- sqrt[.25 - c] + .5 Der Amerikaner ist die Orchidee unter den MenschenVolker Pispers
Like a lot of people here, I'm not too impressed by mainstream economists, but the fact that the FT can't tell the difference between average and median, while the WSWS can, is something even I would never have expected.
