Austerity package meets low earners: Inequality endangers our society!

Austerity package meets low earners: Inequality endangers our society!

A current report by the budget service shows that the austerity measures adopted by the Federal Government particularly put a great burden on the lower income groups. Accordingly, the lowest income decilator bears eight percent of the net consolidation volume, while the top decil contributes 14 percent. This inequality is reinforced by the abolition of the climate bonus, which affects all income layers relatively evenly, but budgets with lower incomes disproportionately burdened. This led to a higher relative income reduction for the poorest households that are anyway in a tense economic situation, as the [Kleine Zeitung] (https://www.kleinezeitung.at/service/newsticker/innenspolitik/19711460/sparpaket-tredt-laut-laut-laut-inbeit- more) emphasizes.

The effects of current austerity policy are serious: an average decline in household income is forecast by 0.8 percent for 2025. A reduction of 2.3 percent in the lowest decil and only 0.4 percent in the top decil. This reduction could increase to 1.6 percent by 2029, although the poorest layers are still the most affected.

inequality in the distribution

inequality is a widespread phenomenon that can be observed not only in Austria, but also internationally. According to the [Federal Center for Political Education] (https://www.bpb.de/shop/zeitschratzen/izpb/social-unglecheit-354/520845/ Einsourfers-und-vermoegensungleheit/), the lower half of the population are responsible for less than 24 percent of the total gross acquisition, while the top ten percent of the income and almost Have 60 percent of the assets. This inequality is reinforced by hereditary assets and unequal educational opportunities.

Especially the Corona pandemic and the consequences of the Ukraine secretary did not have the serious negative effects on income, as originally expected. However, increasing inflation is disproportionate poorer households, which continues to open the social scissors. The poverty rate in Germany is currently 17.8 percent, with similar tendencies to be observed in Austria that endanger social stability.

political reactions and recommendations

The Greens criticized the federal government's savings package as "anti -social", in particular families and single parents. Finance Minister Markus Marterbauer from the SPÖ sees the negative distribution effects of the measures, but refers to more positive effects through other tax measures. He announced the "Task Force Funding" in order to target tax evasion and thus achieve a fairer distribution.

An important factor in combating social inequality are state measures such as raising the top tax rate, increase in the minimum wage and the introduction of a wealth tax. These could help reduce the gap between the different income layers. The Böckler-Report also leads to an increasing gini coefficient, which is a measure of income relief, and suggests recommendations for action to counteract the social disintegration.