Incomes And Prices : Germany

Incomes. In recent decades, incomes have increased constantly in Germany. Between 1960 and 1994, the disposable income of private households in the western part of the country rose tenfold, from DM 188 billion to just under DM 1,864 billion; in 1996 the disposable income of private households in the whole of Germany was about DM 2,307 billion. The family budget has grown considerably in real terms, too, that is to say, allowing for inflation.

Income derives from many different sources. The main source of gross income is employment, i.e. wages and salaries including social insurance contributions. In addition there are dividends from shares, income from property and other assets, as well as public support in the form of child and unemployment benefits, pensions and other remittances. Disposable income is what is left over after deduction of taxes and social insurance contributions as well as regular remittances (e.g. by foreign workers to their native countries). Just under half of the disposable income is accounted for by net wages and salaries, well over one third by profit-drawing and net income from assets, and more than one fourth by social security benefits.